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Lockheed (LMT) Wins Navy Deal to Aid Spain's MH-60R Helicopters
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Lockheed Martin Corp. (LMT - Free Report) recently secured a modification contract involving the MH-60R aircraft. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $132.8 million, the contract is projected to be completed by June 2029. Per the terms of the deal, Lockheed will provide non-recurring engineering efforts in support of bringing eight MH-60R aircraft from a standard Foreign Military Sales (FMS) configuration to a unique configuration for the government of Spain.
Through this modification, Lockheed will also procure eight embedded global positioning system inertial navigation systems spares, four airborne low-frequency sonars and production spares, and provide associated field service representative support for the MH-60R helicopter.
A major portion of the work related to this deal will be executed in Owego, NY; Stratford, CT; and Brest, France.
What’s Favoring Lockheed?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, military helicopters that play a critical role in military missions have also witnessed a significant rise in demand.
To this end, it is imperative to mention that U.S. military helicopters have gained prominence and significant traction lately due to advancements and integration of new tactical, logistical and other important features. Lockheed, being a prominent helicopter manufacturer, thus wins frequent contracts from the Pentagon and other U.S. allies for its combat-proven helicopter programs like the MH-60R Seahawk.
Notably, MH-60R brings transformational anti-submarine and anti-surface warfare capabilities to navies around the world. Impressively, the global fleet of MH-60R helicopters has achieved 1 million fleet flight hours in early 2023. This helicopter is currently operational with the U.S. Navy, Royal Danish Navy, Royal Australian Navy, Royal Saudi Naval Forces and the Indian Navy.
Undoubtedly, this reflects the solid demand that LMT’s MH-60R Seahawk helicopter enjoys in the combat rotorcraft market, which, in turn, ushers in valuable contracts for Lockheed, like the latest one. Such contract wins, in turn, should boost Lockheed’s revenue growth in the coming quarters.
LMT’s Prospects in the Helicopter Market
Looking ahead, rising geopolitical and cross-border conflicts prevalent across the globe, as evident from the ongoing hostilities in the Middle East, have forced nations to increase their defense spending toward procuring combat-proven helicopters to enhance their aerial security. Per a report from the Mordor Intelligence firm, the global military rotorcraft market is likely to witness a CAGR of more than 4% during the 2023-2028 period.
Such a solid market prospect offers strong growth opportunities for Lockheed, with the company offering a robust portfolio for a handful of combat-proven helicopters. Impressively, in October 2023, the Norwegian government placed an order for six of LMT’s MH-60R Seahawk helicopters. This reflects the fact that additional new customers are demanding for LMT’s MH-60R helicopter program, which already enjoys a prominent position in the global military rotorcraft market.
Apart from MH-60R, LMT’s Sikorsky unit includes helicopters like Black Hawk, HH-60W Combat Rescue helicopter, CH-53K, S-97 Raider and a few more. As the largest defense contractor in the United States and with a handful of combat-proven helicopters in its portfolio, LMT surely enjoys a competitive edge in the global military rotorcraft market.
Peer Opportunities
Other renowned combat helicopter manufacturers that are likely to gain from the expanding global military rotorcraft market are Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Boeing (BA - Free Report) .
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 are the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for 2023 sales implies growth of 6.4% from the 2022 reported figure.
Airbus is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for its 2023 sales implies growth of 12.9% from the year-ago reported figure.
Boeing’s Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 15.4% from the 2022 reported figure.
Price Movement
In the past three months, shares of Lockheed have risen 5% against the industry’s 7.8% decline.
Image: Shutterstock
Lockheed (LMT) Wins Navy Deal to Aid Spain's MH-60R Helicopters
Lockheed Martin Corp. (LMT - Free Report) recently secured a modification contract involving the MH-60R aircraft. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $132.8 million, the contract is projected to be completed by June 2029. Per the terms of the deal, Lockheed will provide non-recurring engineering efforts in support of bringing eight MH-60R aircraft from a standard Foreign Military Sales (FMS) configuration to a unique configuration for the government of Spain.
Through this modification, Lockheed will also procure eight embedded global positioning system inertial navigation systems spares, four airborne low-frequency sonars and production spares, and provide associated field service representative support for the MH-60R helicopter.
A major portion of the work related to this deal will be executed in Owego, NY; Stratford, CT; and Brest, France.
What’s Favoring Lockheed?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, military helicopters that play a critical role in military missions have also witnessed a significant rise in demand.
To this end, it is imperative to mention that U.S. military helicopters have gained prominence and significant traction lately due to advancements and integration of new tactical, logistical and other important features. Lockheed, being a prominent helicopter manufacturer, thus wins frequent contracts from the Pentagon and other U.S. allies for its combat-proven helicopter programs like the MH-60R Seahawk.
Notably, MH-60R brings transformational anti-submarine and anti-surface warfare capabilities to navies around the world. Impressively, the global fleet of MH-60R helicopters has achieved 1 million fleet flight hours in early 2023. This helicopter is currently operational with the U.S. Navy, Royal Danish Navy, Royal Australian Navy, Royal Saudi Naval Forces and the Indian Navy.
Undoubtedly, this reflects the solid demand that LMT’s MH-60R Seahawk helicopter enjoys in the combat rotorcraft market, which, in turn, ushers in valuable contracts for Lockheed, like the latest one. Such contract wins, in turn, should boost Lockheed’s revenue growth in the coming quarters.
LMT’s Prospects in the Helicopter Market
Looking ahead, rising geopolitical and cross-border conflicts prevalent across the globe, as evident from the ongoing hostilities in the Middle East, have forced nations to increase their defense spending toward procuring combat-proven helicopters to enhance their aerial security. Per a report from the Mordor Intelligence firm, the global military rotorcraft market is likely to witness a CAGR of more than 4% during the 2023-2028 period.
Such a solid market prospect offers strong growth opportunities for Lockheed, with the company offering a robust portfolio for a handful of combat-proven helicopters. Impressively, in October 2023, the Norwegian government placed an order for six of LMT’s MH-60R Seahawk helicopters. This reflects the fact that additional new customers are demanding for LMT’s MH-60R helicopter program, which already enjoys a prominent position in the global military rotorcraft market.
Apart from MH-60R, LMT’s Sikorsky unit includes helicopters like Black Hawk, HH-60W Combat Rescue helicopter, CH-53K, S-97 Raider and a few more. As the largest defense contractor in the United States and with a handful of combat-proven helicopters in its portfolio, LMT surely enjoys a competitive edge in the global military rotorcraft market.
Peer Opportunities
Other renowned combat helicopter manufacturers that are likely to gain from the expanding global military rotorcraft market are Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Boeing (BA - Free Report) .
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 are the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT boasts a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for 2023 sales implies growth of 6.4% from the 2022 reported figure.
Airbus is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for its 2023 sales implies growth of 12.9% from the year-ago reported figure.
Boeing’s Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for its 2023 sales implies an improvement of 15.4% from the 2022 reported figure.
Price Movement
In the past three months, shares of Lockheed have risen 5% against the industry’s 7.8% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.