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Boeing (BA) Secures Contract to Aid MQ-25 Stingray Jet Production
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The Boeing Company (BA - Free Report) recently clinched a modification contract involving MQ-25 Stingray aircraft. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $36 million, the contract is expected to be completed by April 2024. Per the terms of the deal, Boeing will provide non-recurring engineering for the preliminary design review of six sub-systems to mitigate component obsolescence for supporting low-rate initial production of MQ-25 Stingray jets.
The majority of the work related to this deal will be executed in Endicott, NY, and Saint Louis, MO.
What’s Favoring Boeing?
Boeing, one of the major players in the defense business, stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Furthermore, the company's expertise lies in a wide variety of aircraft components, repairs and modification-related programs.
Notably, its MQ-25 Stingray, an unmanned aircraft system designed for the U.S. Navy mission, can provide the needed robust refueling capability, thereby extending the combat range of BA’s deployed fighter jets like F/A-18 Super Hornet and EA-18G Growler. In addition to Stingray, its Defense, Space & Security segment’s portfolio boasts other military aircraft, like F-15 programs, P-8 programs, KC-46A Tanker and T-7A Red Hawk.
Such combat-proven aerospace programs and associated services offered by Boeing, along with the rapidly growing need for military aircraft due to heightened geopolitical uncertainties worldwide, have resulted in a solid inflow of orders from the Pentagon. The latest contract win is an example of that. Such strong order flows are expected to boost the top-line performance of its defense business segment.
Growth Prospects
As nations across the globe are spending heftily to defend their borders more efficiently in the wake of recent unrests like the Russian invasion in Ukraine and the ongoing hostility in the Middle East, the future of the military aviation market remains bright. To this end, the Mordor Intelligence firm’s report projects the military aviation market to witness a CAGR of 7.4% during 2023-2028.
Impressively, North America constitutes the largest share of the aforementioned market. Boeing, being the nation’s largest jet maker, enjoys a dominant position in the military aviation market and thus, can be expected to benefit significantly from this market’s anticipated growth.
These projections are also expected to boost other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Since its inception, Northrop Grumman has been a pioneer in the development of combat aircraft. The company has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance and aircraft self-protection systems. Its major programs include MQ-4C Triton, E-2D Hawkeye and a few more jets.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for the company’s 2023 sales implies a 6.6% improvement from that reported in 2022.
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacturing, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
LMT boasts a long-term earnings growth rate of 8.6%. The company delivered a four-quarter average earnings surprise of 4.35%.
Textron’s business unit Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft, preferred for training and attack missions. The unit’s military trainer and defense aircraft includes the T-6 trainer, which has been used to train pilots from more than 20 countries, and the AT-6 light attack military aircraft.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for the company’s 2023 sales implies a 6.4% improvement from the previous year’s reported figure.
Price Movement and Zacks Rank
Shares of Boeing have risen 24.8% in the past year against the industry’s decline of 12.1%.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Boeing (BA) Secures Contract to Aid MQ-25 Stingray Jet Production
The Boeing Company (BA - Free Report) recently clinched a modification contract involving MQ-25 Stingray aircraft. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $36 million, the contract is expected to be completed by April 2024. Per the terms of the deal, Boeing will provide non-recurring engineering for the preliminary design review of six sub-systems to mitigate component obsolescence for supporting low-rate initial production of MQ-25 Stingray jets.
The majority of the work related to this deal will be executed in Endicott, NY, and Saint Louis, MO.
What’s Favoring Boeing?
Boeing, one of the major players in the defense business, stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Furthermore, the company's expertise lies in a wide variety of aircraft components, repairs and modification-related programs.
Notably, its MQ-25 Stingray, an unmanned aircraft system designed for the U.S. Navy mission, can provide the needed robust refueling capability, thereby extending the combat range of BA’s deployed fighter jets like F/A-18 Super Hornet and EA-18G Growler. In addition to Stingray, its Defense, Space & Security segment’s portfolio boasts other military aircraft, like F-15 programs, P-8 programs, KC-46A Tanker and T-7A Red Hawk.
Such combat-proven aerospace programs and associated services offered by Boeing, along with the rapidly growing need for military aircraft due to heightened geopolitical uncertainties worldwide, have resulted in a solid inflow of orders from the Pentagon. The latest contract win is an example of that. Such strong order flows are expected to boost the top-line performance of its defense business segment.
Growth Prospects
As nations across the globe are spending heftily to defend their borders more efficiently in the wake of recent unrests like the Russian invasion in Ukraine and the ongoing hostility in the Middle East, the future of the military aviation market remains bright. To this end, the Mordor Intelligence firm’s report projects the military aviation market to witness a CAGR of 7.4% during 2023-2028.
Impressively, North America constitutes the largest share of the aforementioned market. Boeing, being the nation’s largest jet maker, enjoys a dominant position in the military aviation market and thus, can be expected to benefit significantly from this market’s anticipated growth.
These projections are also expected to boost other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Since its inception, Northrop Grumman has been a pioneer in the development of combat aircraft. The company has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance and aircraft self-protection systems. Its major programs include MQ-4C Triton, E-2D Hawkeye and a few more jets.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for the company’s 2023 sales implies a 6.6% improvement from that reported in 2022.
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacturing, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
LMT boasts a long-term earnings growth rate of 8.6%. The company delivered a four-quarter average earnings surprise of 4.35%.
Textron’s business unit Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft, preferred for training and attack missions. The unit’s military trainer and defense aircraft includes the T-6 trainer, which has been used to train pilots from more than 20 countries, and the AT-6 light attack military aircraft.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for the company’s 2023 sales implies a 6.4% improvement from the previous year’s reported figure.
Price Movement and Zacks Rank
Shares of Boeing have risen 24.8% in the past year against the industry’s decline of 12.1%.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.