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Lockheed (LMT) Wins $109M Contract for Trident II Missile
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Space Systems, recently clinched a contract involving its Trident II (D5) Missile. The award has been provided by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $109.2 million, the contract is projected to be completed by Feb 28, 2029. Per the terms of the deal, Lockheed will support the integration of the Trident II (D5) Missile and reentry subsystems into the Common Missile Compartment for the U.S./U.K. Columbia/Dreadnought submarine construction programs.
A major portion of the work related to this deal will be carried out in Cape Canaveral, FL.
What’s Favoring Lockheed?
Lockheed’s Trident II D5 fleet ballistic missile is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon and Trident I C4 programs. The fact that this program is the only submarine-launched intercontinental ballistic missile currently in production in the United States surely highlights its significance in the country’s naval defense.
Notably, Lockheed’s Space Systems unit is the prime contractor for the development, production and support equipment of this missile. The company also supplies technical and logistical support at sites where the missile is deployed.
Due to its remarkable features, which are well-suited for any military mission, Lockheed continues to witness a steady inflow of orders involving the Trident missile. The latest contract win is a testament to that. This shall bolster LMT’s Space Systems unit’s revenues that registered a solid 3.5% year-over-year growth in the fourth quarter of 2023.
Growth Prospects
Of late, nations have been increasing their spending on military equipment and weaponry to modernize and upgrade their defense systems amid rising geopolitical tensions. In this context, the demand for missiles is likely to gain momentum as these play a very important role in military missions.
Per the latest report from the Mordor Intelligence firm, the global missile and missile defense systems market is expected to witness a CAGR of 4.8% over the 2024-2029 period. Such projections exemplify immense opportunities for Lockheed to capitalize on the expanding market.
Notably, the company’s Space Systems unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Next Generation Interceptor — a program with the Missile Defense Agency — that utilizes next generation propulsion and sensors to provide homeland missile defense, apart from Trident II missile. It also builds the Next Generation Overhead Persistent Infrared (Next Gen OPIR) system, which provides the U.S. Space Force with enhanced worldwide missile warning capabilities.
Peer Opportunities
LMT apart, other prominent defense majors that are likely to enjoy the perks of the expanding missile defense market are Northrop Grumman (NOC - Free Report) , General Dynamics (GD - Free Report) and RTX Corp. (RTX - Free Report) , which are involved in missile manufacturing or providing support services for the same.
Northrop Grumman’s Missile Products business unit is a leading U.S. provider of solid rocket propulsion for national security and defense, providing stages for weapon systems, such as air-launched missiles, interceptors, submarine-launched systems and hypersonic missile systems.
NOC has a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for its 2024 sales implies growth of 4.5% from the prior-year reported figure.
General Dynamics’ Ordnance and Tactical Systems (“OTS”) designs, develops and produces a comprehensive array of sophisticated weapon systems for ground forces. It also produces next-generation weapon systems for shipboard and aircraft applications. OTS maintains a leading position in providing missile subsystems in support of U.S. tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 10.8%. The Zacks Consensus Estimate for GD’s 2024 sales indicates growth of 8.9% from the prior-year reported figure.
RTX’s Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. Its technology delivers unprecedented combat power to the world’s most sophisticated fourth and fifth-generation aircraft and across every mission phase.
RTX boasts a long-term earnings growth rate of 10.2%. The Zacks Consensus Estimate for its 2024 sales indicates growth of 5.7% from the prior-year reported figure.
Price Movement
In the past three months, shares of Lockheed have lost 3.4% compared with the industry’s decline of 0.9%.
Image: Bigstock
Lockheed (LMT) Wins $109M Contract for Trident II Missile
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Space Systems, recently clinched a contract involving its Trident II (D5) Missile. The award has been provided by the Strategic Systems Programs, Washington, D.C.
Details of the Deal
Valued at $109.2 million, the contract is projected to be completed by Feb 28, 2029. Per the terms of the deal, Lockheed will support the integration of the Trident II (D5) Missile and reentry subsystems into the Common Missile Compartment for the U.S./U.K. Columbia/Dreadnought submarine construction programs.
A major portion of the work related to this deal will be carried out in Cape Canaveral, FL.
What’s Favoring Lockheed?
Lockheed’s Trident II D5 fleet ballistic missile is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon and Trident I C4 programs. The fact that this program is the only submarine-launched intercontinental ballistic missile currently in production in the United States surely highlights its significance in the country’s naval defense.
Notably, Lockheed’s Space Systems unit is the prime contractor for the development, production and support equipment of this missile. The company also supplies technical and logistical support at sites where the missile is deployed.
Due to its remarkable features, which are well-suited for any military mission, Lockheed continues to witness a steady inflow of orders involving the Trident missile. The latest contract win is a testament to that. This shall bolster LMT’s Space Systems unit’s revenues that registered a solid 3.5% year-over-year growth in the fourth quarter of 2023.
Growth Prospects
Of late, nations have been increasing their spending on military equipment and weaponry to modernize and upgrade their defense systems amid rising geopolitical tensions. In this context, the demand for missiles is likely to gain momentum as these play a very important role in military missions.
Per the latest report from the Mordor Intelligence firm, the global missile and missile defense systems market is expected to witness a CAGR of 4.8% over the 2024-2029 period. Such projections exemplify immense opportunities for Lockheed to capitalize on the expanding market.
Notably, the company’s Space Systems unit, apart from developing satellites and space transportation system, also builds strike missile as well as missile defense systems. Its major programs include Next Generation Interceptor — a program with the Missile Defense Agency — that utilizes next generation propulsion and sensors to provide homeland missile defense, apart from Trident II missile. It also builds the Next Generation Overhead Persistent Infrared (Next Gen OPIR) system, which provides the U.S. Space Force with enhanced worldwide missile warning capabilities.
Peer Opportunities
LMT apart, other prominent defense majors that are likely to enjoy the perks of the expanding missile defense market are Northrop Grumman (NOC - Free Report) , General Dynamics (GD - Free Report) and RTX Corp. (RTX - Free Report) , which are involved in missile manufacturing or providing support services for the same.
Northrop Grumman’s Missile Products business unit is a leading U.S. provider of solid rocket propulsion for national security and defense, providing stages for weapon systems, such as air-launched missiles, interceptors, submarine-launched systems and hypersonic missile systems.
NOC has a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for its 2024 sales implies growth of 4.5% from the prior-year reported figure.
General Dynamics’ Ordnance and Tactical Systems (“OTS”) designs, develops and produces a comprehensive array of sophisticated weapon systems for ground forces. It also produces next-generation weapon systems for shipboard and aircraft applications. OTS maintains a leading position in providing missile subsystems in support of U.S. tactical and strategic missiles.
General Dynamics boasts a long-term earnings growth rate of 10.8%. The Zacks Consensus Estimate for GD’s 2024 sales indicates growth of 8.9% from the prior-year reported figure.
RTX’s Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. Its technology delivers unprecedented combat power to the world’s most sophisticated fourth and fifth-generation aircraft and across every mission phase.
RTX boasts a long-term earnings growth rate of 10.2%. The Zacks Consensus Estimate for its 2024 sales indicates growth of 5.7% from the prior-year reported figure.
Price Movement
In the past three months, shares of Lockheed have lost 3.4% compared with the industry’s decline of 0.9%.
Image Source: Zacks Investment Research
Zacks Rank
LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.