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Boeing (BA) Clinches Deal to Supply 16 P-8A Poseidon Aircraft

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The Boeing Company(BA - Free Report) recently clinched a deal to supply 16 P-8A Poseidon aircraft to the Royal Canadian Air Force as part of the Canadian Multi-Mission Aircraft (“CMMA”) project. The agreement makes Canada the fifth NATO nation and the ninth defense partner to choose the P-8 as its versatile multi-mission aircraft.

This aircraft possesses all the capabilities to meet the CMMA’s requirements and ensures cost-effective life-cycle sustainment, thus leading to such a strong order inflow for Boeing, involving the aircraft.

Significance of the P-8A PoseidonAircraft

Boeing’s P-8 is truly a multi-mission maritime patrol aircraft, excelling at anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance and search and rescue.

The P-8 can fly higher and get to the fight faster. Its shorter transit times reduce the size of the area of probability when searching for submarines, surface vessels or search and rescue survivors. P-8 is also designed for low-altitude missions and has already proven its abilities to support humanitarian and search and rescue missions.

Due to such remarkable features, the company enjoys strong demand for the aircraft. This jet’s demand strength can be gauged from the company having delivered 160 aircraft to date.

Given the aircraft’s integration into the defense portfolios of numerous countries and the potential to join many others, Boeing is likely to experience steady demand for this military aircraft.

Growth Prospects & Peer Moves

With nations worldwide consistently strengthening their defense structure, augmented spending on military aircraft can be witnessed. Going forward, per the report from the Coherent Market Insights firm, the global military aircraft market is poised to witness a CAGR of 5.4% over the 2022-2030 period.

In light of such growth prospects, as a leading manufacturer of military aircraft, Boeing is likely to secure additional orders, like the latest one. Such a consistent order inflow is likely to boost Boeing’s orderbook and thereby bolster its revenue generation prospects.

The aforementioned market’s growth prospects are also likely to benefit other defense companies that have a solid presence in the military aircraft space, as mentioned below:

Lockheed Martin(LMT - Free Report) : It designs and integrates systems and manufactures the most agile and effective aircraft. Its product portfolio includes the Black Hawk, C-130J Super Hercules, F-16 Fighting Falcon, F-35 Lightning II fighter aircraft, etc.

Lockheed boasts a long-term earnings growth rate of 8.6%. The Zacks Consensus Estimate for its 2023 sales suggests a growth rate of 0.9% from the prior-year reported figure.

Airbus Group (EADSY - Free Report) : Itsmilitary aircraft consist of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.

Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 29.2% value to its investors in the past year.

Textron (TXT - Free Report) :Its military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light-attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.

Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 7.5% in the past year.

Price Performance

Shares of Boeing have rallied 26.6% in the past year against the industry’s decline of 14.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Boeing carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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