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Air Industries (AIRI) Unit Wins Deal to Supply F-35 Parts

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Air Industries Group’s (AIRI - Free Report) business unit, Sterling Engineering Corporation, recently clinched two contracts worth $3.2 million.

The contracts have been awarded to supply engine components used in the F-135 jet engine that powers the Lockheed Martin F-35 Lightning II. Delivery of the contract is expected to begin in early 2024.

What’s Favoring Air Industries?

Lockheed Martin’s F-35 fleet boasts features that make it an ideal choice for many nations. The company’s constant efforts to modernize and upgrade the fighter jet using advanced technologies to meet current warfare needs boost its demand.

The U.S. government has a current inventory target of 2,456 F-35 jets for the Air Force, Marine Corps and Navy. U.S. Department of Defense’s fiscal 2024 budget includes a spending plan of $842 billion, out of which $61.1 billion is to focus on fighter jets, including the F-35.

Consequently, one may expect Air Industries to witness more order inflows for engine components of the F-35 in the coming days, which should significantly bolster this top line.

Other Defense Majors

The rising U.S. defense budget is likely to benefit other defense primes like BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Lockheed Martin (LMT - Free Report) .

BAE Systems remain well aligned with U.S. National Defense Strategy priorities. In December 2023, the company received a $211 million firm-fixed-price modification agreement to a previously awarded contract by the U.S. Marine Corps for more Amphibious Combat Vehicles.  

BAE Systems boasts a long-term (three-to five-years) earnings growth rate of 14.2%. The Zacks Consensus Estimate of BAESY’s fiscal 2025 sales implies a growth rate of 12.6% from the prior year.

Northrop Grumman’s funding for its franchise programs, GBSD and B-21 has been increased by the U.S. Department of Defense. In October 2023, the U.S. Navy awarded a contract to design 57mm guided high explosive ammunition. The Trident II D5 Submarine Launched Ballistic Missile was successfully flight-tested with NOC’s solid rocket motors.

Northrop’s long-term earnings growth rate is pegged at 2.3%. The Zacks Consensus Estimate of NOC’s 2024 sales implies a growth rate of 5.2% from the prior year.

Lockheed Martin has been a prime supplier of defense products to the United States. In October 2023, LMT secured a contract from the U.S. Navy to produce eight Sikorsky MH-60R Seahawk helicopters for the Spanish Navy and a contract to develop and deliver up to four 300 kW-class laser weapon systems to the U.S. Army’s Indirect Fire Protection Capability-High Energy Laser prototype program.

Lockheed Martin’s long-term earnings growth is pegged at 8.6%. The Zacks Consensus Estimate of LMT’s 2024 sales implies a growth rate of 2.9% from the prior year.

Price Performance

In the past month, shares of AIRI have gained 9.2% compared with the industry’s 5.3% rally.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Air Industries Group currently has 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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