We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lockheed (LMT) Wins Deal to Support Poland's F-16 Jet Program
Read MoreHide Full Article
Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business unit recently clinched a contract involving the F-16 fighter jet program. The award has been offered by the Air Force Life Cycle Management Center, Hill Air Force Base, UT.
Details of the Deal
Valued at $32.3 million, the contract is expected to be completed by Dec 31, 2029. Per the terms of the deal, Lockheed will provide foreign military sales support to Poland for the F-16 Multifunction Information Distribution System-Joint Tactical Radio System Integration.
Work related to this contract will be carried out in Fort Worth, TX.
Importance of the F-16 Jets
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders have boosted the demand for defense products. Combat aircraft constitute a major portion of this portfolio. It is imperative to mention here that the F-16 Falcon jets have significantly risen in importance on a global scale over the past few years.
For the past couple of years, the F-16 has witnessed a significant development, with nations like Taiwan, Bulgaria, Morocco and Bahrain signing agreements to procure new F-16 aircraft. In more recent times, nations like Greece, Jordan, Korea and Singapore have been procuring F-16 jets and associated spare parts.
In order to make the most of this rising demand, Lockheed introduced F-16 Block 70/72 in 2020, which is the most advanced 4th generation fighter ever built, combining numerous capabilities and structural upgrades. This model provides a new aircraft structure that lasts 50% longer than the previous F-16 version.
Such advancements might have been ushering in contracts from Pentagon and other U.S. allies, like the latest one, thereby boosting Lockheed’s revenue prospects.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, other nations like Europe and the United States have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending significantly on defense products, including combat aircraft.
Per a Mordor Intelligence report, the global fighter aircraft market is expected to witness a CAGR of 3.72% during 2023-2028, with North America constituting the largest share of this market.
Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Lockheed, which is the largest defense contractor in the United States. Apart from F-16, its Aeronautics business segment’s product portfolio includes combat-proven jets like F-35 Lightning II stealth aircraft, C-130 tactical airlifter and F-22 Raptor.
Peer Moves
Other U.S.-based combat jet manufacturers that stand to gain from the expanding fighter aircraft market are Boeing (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Textron (TXT - Free Report) .
Boeing’s Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft. This segment's primary products include military aircraft like F/A-18E/F Super Hornet, F-15, P-8, KC-46A Tanker and T-7A Red Hawk aircraft.
BA has a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies a 15.6% increase from the 2022 reported figure.
Since its inception, Northrop Grumman has been a pioneer in the development of manned combat aircraft. The company also 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. This helps warfighters in accomplishing missions anytime, anywhere and under any conditions.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for its 2023 sales indicates a 6.6% increase from the previous year’s reported number.
Textron’s business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military aircraft, preferred for training and attack missions. Some of Textron’s renowned products include the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT has a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for its 2023 sales indicates a 6.4% increase from the year-ago reported figure.
Price Movement and Zacks Rank
Shares of Lockheed have risen 6.3% in the past three months compared with the industry's 5.4% growth.
Image: Bigstock
Lockheed (LMT) Wins Deal to Support Poland's F-16 Jet Program
Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business unit recently clinched a contract involving the F-16 fighter jet program. The award has been offered by the Air Force Life Cycle Management Center, Hill Air Force Base, UT.
Details of the Deal
Valued at $32.3 million, the contract is expected to be completed by Dec 31, 2029. Per the terms of the deal, Lockheed will provide foreign military sales support to Poland for the F-16 Multifunction Information Distribution System-Joint Tactical Radio System Integration.
Work related to this contract will be carried out in Fort Worth, TX.
Importance of the F-16 Jets
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders have boosted the demand for defense products. Combat aircraft constitute a major portion of this portfolio. It is imperative to mention here that the F-16 Falcon jets have significantly risen in importance on a global scale over the past few years.
For the past couple of years, the F-16 has witnessed a significant development, with nations like Taiwan, Bulgaria, Morocco and Bahrain signing agreements to procure new F-16 aircraft. In more recent times, nations like Greece, Jordan, Korea and Singapore have been procuring F-16 jets and associated spare parts.
In order to make the most of this rising demand, Lockheed introduced F-16 Block 70/72 in 2020, which is the most advanced 4th generation fighter ever built, combining numerous capabilities and structural upgrades. This model provides a new aircraft structure that lasts 50% longer than the previous F-16 version.
Such advancements might have been ushering in contracts from Pentagon and other U.S. allies, like the latest one, thereby boosting Lockheed’s revenue prospects.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, other nations like Europe and the United States have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending significantly on defense products, including combat aircraft.
Per a Mordor Intelligence report, the global fighter aircraft market is expected to witness a CAGR of 3.72% during 2023-2028, with North America constituting the largest share of this market.
Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Lockheed, which is the largest defense contractor in the United States. Apart from F-16, its Aeronautics business segment’s product portfolio includes combat-proven jets like F-35 Lightning II stealth aircraft, C-130 tactical airlifter and F-22 Raptor.
Peer Moves
Other U.S.-based combat jet manufacturers that stand to gain from the expanding fighter aircraft market are Boeing (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Textron (TXT - Free Report) .
Boeing’s Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft. This segment's primary products include military aircraft like F/A-18E/F Super Hornet, F-15, P-8, KC-46A Tanker and T-7A Red Hawk aircraft.
BA has a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies a 15.6% increase from the 2022 reported figure.
Since its inception, Northrop Grumman has been a pioneer in the development of manned combat aircraft. The company also 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. This helps warfighters in accomplishing missions anytime, anywhere and under any conditions.
NOC boasts a long-term earnings growth rate of 2.4%. The Zacks Consensus Estimate for its 2023 sales indicates a 6.6% increase from the previous year’s reported number.
Textron’s business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military aircraft, preferred for training and attack missions. Some of Textron’s renowned products include the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT has a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for its 2023 sales indicates a 6.4% increase from the year-ago reported figure.
Price Movement and Zacks Rank
Shares of Lockheed have risen 6.3% in the past three months compared with the industry's 5.4% growth.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.