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Lockheed (LMT) Wins Deal to Aid the MLRS Family of Munitions
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Lockheed Martin Corp. (LMT - Free Report) recently secured a contract involving the Multiple Launch Rocket System (“MLRS”) family of munition programs. The award has been offered by the Army Contracting Command, Redstone Arsenal, AL.
Details of the Deal
Valued at $199.1 million, the contract is expected to be completed by Nov 28, 2028. Per the terms of the deal, Lockheed will provide industrial engineering services for the MLRS family of munition programs.
The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, increased spending has been witnessed on missile capabilities, resulting in a significant order inflow for companies like Lockheed Martin, which enjoy a dominant position in the development of missiles.
Lockheed’s MLRS is a highly mobile, automatic system that fires surface-to-surface rockets and missiles from the M270 and High Mobility Artillery Rocket System (“HIMARS”) platforms produced for the U.S. Army and international customers.
As far as recent developments in this production section are concerned, LMT is under contract to recapitalize more than 50 of the U.S. Army’s M270 launchers. Moreover, in September 2023, the Armaments Agency of the Polish Ministry of National Defense signed a framework agreement with Lockheed Martin for the Homar-A MLRS. Under the program, the Polish industry will work with Lockheed Martin to integrate the key components of the HIMARS rocket launcher into a Jelcz 6x6 truck.
These are indicative of the solid demand LMT’s MLRS family of munition programs already enjoys in the missile market, which ushers in steady order flows for this defense contractor, like the latest one. Such contracts are likely to boost Lockheed’s revenue generation prospects.
Growth Prospects
Following Russia’s invasion of Ukraine and the ongoing hostile unrest in the Middle East, it is expected that other nations will further bolster their missile arsenal to protect their borders from any such unprecedented attacks. To this end, the Mordor Intelligence firm expects the missile and missile defense system market to witness a CAGR of 4.8% during the 2023-2028 period. LMT’s proficiency in missile manufacturing positions it favorably to capitalize on such growth opportunities.
Other defense companies that stand to benefit from the expanding missile market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. Its product portfolio includes the Integrated Air and Missile Defense Battle Command System, the Guided Multiple Launch Rocket System propulsion and warhead subsystems, the Hypersonic Attack Cruise Missile, the Advanced Anti-Radiation Guided Missile and a few other combat proven products that support missile defense systems.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for Northrop’s 2023 sales indicates an improvement of 6.6% from the 2022 reported figure.
General Dynamics (GD - Free Report) : General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
GD boasts a long-term earnings growth rate of 9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates growth of 9.1% from the 2022 reported figure.
RTX Corp. (RTX - Free Report) : RTX’s business unit, Missiles and Defense, is a prominent U.S. missile maker. Its portfolio includes the AIM-9X Sidewinder missile, the AIM-9X Block II missile, RAM-guided missile weapon system, etc.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for its 2023 sales indicates growth of 10.5% from the 2022 reported figure.
Price Movement
In the past year, shares of Lockheed Martin have plunged 8% compared with the industry’s 11.5% decline.
Image: Bigstock
Lockheed (LMT) Wins Deal to Aid the MLRS Family of Munitions
Lockheed Martin Corp. (LMT - Free Report) recently secured a contract involving the Multiple Launch Rocket System (“MLRS”) family of munition programs. The award has been offered by the Army Contracting Command, Redstone Arsenal, AL.
Details of the Deal
Valued at $199.1 million, the contract is expected to be completed by Nov 28, 2028. Per the terms of the deal, Lockheed will provide industrial engineering services for the MLRS family of munition programs.
The work related to this deal will be carried out at multiple locations across the United States.
What’s Favoring Lockheed?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, increased spending has been witnessed on missile capabilities, resulting in a significant order inflow for companies like Lockheed Martin, which enjoy a dominant position in the development of missiles.
Lockheed’s MLRS is a highly mobile, automatic system that fires surface-to-surface rockets and missiles from the M270 and High Mobility Artillery Rocket System (“HIMARS”) platforms produced for the U.S. Army and international customers.
As far as recent developments in this production section are concerned, LMT is under contract to recapitalize more than 50 of the U.S. Army’s M270 launchers. Moreover, in September 2023, the Armaments Agency of the Polish Ministry of National Defense signed a framework agreement with Lockheed Martin for the Homar-A MLRS. Under the program, the Polish industry will work with Lockheed Martin to integrate the key components of the HIMARS rocket launcher into a Jelcz 6x6 truck.
These are indicative of the solid demand LMT’s MLRS family of munition programs already enjoys in the missile market, which ushers in steady order flows for this defense contractor, like the latest one. Such contracts are likely to boost Lockheed’s revenue generation prospects.
Growth Prospects
Following Russia’s invasion of Ukraine and the ongoing hostile unrest in the Middle East, it is expected that other nations will further bolster their missile arsenal to protect their borders from any such unprecedented attacks. To this end, the Mordor Intelligence firm expects the missile and missile defense system market to witness a CAGR of 4.8% during the 2023-2028 period. LMT’s proficiency in missile manufacturing positions it favorably to capitalize on such growth opportunities.
Other defense companies that stand to benefit from the expanding missile market are as follows:
Northrop Grumman (NOC - Free Report) : Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. Its product portfolio includes the Integrated Air and Missile Defense Battle Command System, the Guided Multiple Launch Rocket System propulsion and warhead subsystems, the Hypersonic Attack Cruise Missile, the Advanced Anti-Radiation Guided Missile and a few other combat proven products that support missile defense systems.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for Northrop’s 2023 sales indicates an improvement of 6.6% from the 2022 reported figure.
General Dynamics (GD - Free Report) : General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
GD boasts a long-term earnings growth rate of 9%. The Zacks Consensus Estimate for General Dynamics’ 2023 sales indicates growth of 9.1% from the 2022 reported figure.
RTX Corp. (RTX - Free Report) : RTX’s business unit, Missiles and Defense, is a prominent U.S. missile maker. Its portfolio includes the AIM-9X Sidewinder missile, the AIM-9X Block II missile, RAM-guided missile weapon system, etc.
RTX boasts a long-term earnings growth rate of 9.4%. The Zacks Consensus Estimate for its 2023 sales indicates growth of 10.5% from the 2022 reported figure.
Price Movement
In the past year, shares of Lockheed Martin have plunged 8% compared with the industry’s 11.5% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.