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Lockheed (LMT) Wins $168M Deal to Aid CH-53K Stallion Helicopter
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a contract involving the CH-53K King Stallion helicopter. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $168.2 million, the contract is expected to be completed by March 2025. Per the terms of the deal, Lockheed will procure long-lead time materials for full-rate production of 21 CH-53K King Stallion helicopters.
The contract will serve the U.S. Marine Corp. Work related to this deal will be executed in Stratford, CT.
What’s Favoring Lockheed?
Impressively, the CH-53K King Stallion advances Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. Built to thrive on the modern battlefield, including shipboard operations, the CH-53K aircraft is designed to be intelligent, reliable, low maintenance and survivable in the most austere and remote forward operating bases.
More than 1,200 test flight hours have been flown for this helicopter. Moreover, the CH-53K has achieved certain milestones in 2018, including high altitude, hot temperature and degraded visual environment flights.
Such remarkable features of CH-53K must have been driving its demand and, in turn, ushering in contract flows for LMT, like the latest one. These contract flows should boost LMT’s revenues in the coming quarters.
Growth Prospects
In recent times, U.S. military helicopters have gained prominence and significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments can be attributed to Lockheed paving the way for securing valuable helicopter-related contracts of late. The recent contract win is a bright example of that.
Looking ahead, rising geopolitical and cross-border conflicts prevalent across the globe have forced nations to increase their defense spending toward procuring new aircraft and helicopters to enhance their aerial capabilities. Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2023-2028 period.
This should significantly boost Lockheed as the company enjoys a dominant position in the military helicopter market with its portfolio containing programs like e Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding military helicopter market have been discussed below.
The Boeing Company (BA - Free Report) : Its 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.
Boeing has a long-term (three to five years) earnings growth rate of 4%. The Zacks Consensus Estimate for 2023 sales indicates an improvement of 15.4% from the 2022 reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
The company’s long-term earnings growth rate is 12.4%. The consensus estimate for 2023 sales indicates an improvement of 12.9% from the 2022 reported figure.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, 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 consensus mark for 2023 sales indicates an improvement of 6.4% from the 2022 reported figure.
Price Movement
In the past three months, shares of Lockheed have risen 4.7% compared to the industry’s growth of 7.8%.
Image: Bigstock
Lockheed (LMT) Wins $168M Deal to Aid CH-53K Stallion Helicopter
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a contract involving the CH-53K King Stallion helicopter. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $168.2 million, the contract is expected to be completed by March 2025. Per the terms of the deal, Lockheed will procure long-lead time materials for full-rate production of 21 CH-53K King Stallion helicopters.
The contract will serve the U.S. Marine Corp. Work related to this deal will be executed in Stratford, CT.
What’s Favoring Lockheed?
Impressively, the CH-53K King Stallion advances Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. Built to thrive on the modern battlefield, including shipboard operations, the CH-53K aircraft is designed to be intelligent, reliable, low maintenance and survivable in the most austere and remote forward operating bases.
More than 1,200 test flight hours have been flown for this helicopter. Moreover, the CH-53K has achieved certain milestones in 2018, including high altitude, hot temperature and degraded visual environment flights.
Such remarkable features of CH-53K must have been driving its demand and, in turn, ushering in contract flows for LMT, like the latest one. These contract flows should boost LMT’s revenues in the coming quarters.
Growth Prospects
In recent times, U.S. military helicopters have gained prominence and significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments can be attributed to Lockheed paving the way for securing valuable helicopter-related contracts of late. The recent contract win is a bright example of that.
Looking ahead, rising geopolitical and cross-border conflicts prevalent across the globe have forced nations to increase their defense spending toward procuring new aircraft and helicopters to enhance their aerial capabilities. Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2023-2028 period.
This should significantly boost Lockheed as the company enjoys a dominant position in the military helicopter market with its portfolio containing programs like e Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters.
Peer Prospects
Other defense companies that may enjoy the perks of the expanding military helicopter market have been discussed below.
The Boeing Company (BA - Free Report) : Its 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.
Boeing has a long-term (three to five years) earnings growth rate of 4%. The Zacks Consensus Estimate for 2023 sales indicates an improvement of 15.4% from the 2022 reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
The company’s long-term earnings growth rate is 12.4%. The consensus estimate for 2023 sales indicates an improvement of 12.9% from the 2022 reported figure.
Textron (TXT - Free Report) : Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, 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 consensus mark for 2023 sales indicates an improvement of 6.4% from the 2022 reported figure.
Price Movement
In the past three months, shares of Lockheed have risen 4.7% compared to the industry’s growth of 7.8%.
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.