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Boeing (BA) Wins Contract to Aid KC-135 Tanker Jet Program
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The Boeing Company (BA) recently secured a contract involving its KC-135 refueling tanker aircraft. The award has been offered by the Defense Logistics Agency Aviation, Oklahoma City, OK.
Details of the Deal
Valued at $32.2 million, the contract is expected to be completed by Sep 30, 2027. Per the terms of the deal, Boeing will deliver KC-135 ruddevator booms.
Work related to this deal will be carried out in Missouri and Canada.
KC-135 Significance
Boeing’s KC-135 Stratotanker is an aerial refueling aircraft that provides core aerial refueling capability for the U.S. Air Force and has excelled in this role for more than 60 years. It also provides aerial refueling support to the U.S. Air Force, Navy, Marine Corps and allied nation aircraft.
The KC-135 is also capable of transporting litter and ambulatory patients using patient support pallets during aeromedical evacuations. Over the years, the KC-135 has been altered to do other jobs ranging from flying command post missions to reconnaissance.
The fact that two of its variants, KC-135R and KC-135T aircraft, continue to undergo life-cycle upgrades to expand their capabilities and improve reliability indicates the strong demand that this particular product line of Boeing has been enjoying over time. This must have been boosting the order flow for Boeing involving KC-135, like the latest one. Such order flows are projected to bolster BA’s top line in coming days.
Growth Prospects
With growing 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, developed nations like the United States and Europe have already been leading the defense market for some time now.
It is imperative to mention in this context that military aircraft, both manned and unmanned, form an integral constituent of a country’s defense products. Consequently, the refueling aircraft market has been booming lately with the rapid launch of manned and unmanned aerial systems, driven by increasing demand for combat aircraft and military spending of various countries.
To this end, it is imperative to mention that per a report published by the Global Market Insights firm, the global refueling aircraft market is expected to witness a CAGR of 2% during 2024-2032, with North America constituting a major portion of this market. Such projections boost growth prospects for Boeing, the largest aircraft manufacturer in the United States.
Impressively, KC-135 apart, Boeing builds KC-46 Pegasus air refueling tanker jet. Notably, KC-46A is the only multi-mission tanker that’s produced in America for the U.S. Air Force and its allies.
Opportunities for Peers
Aerospace stocks, other than Boeing, which are expected to gain from the growth of the refueling aircraft market have been discussed below.
Airbus (EADSY - Free Report) : Its A330 MRTT has become the world’s first tanker to be certified for automatic air-to-air refueling (A3R) boom operations in daylight, following a successful campaign in collaboration with the Republic of Singapore Air Force (RSAF). With 76 total aircraft sales as of August 2023, the A330 MRTT has been ordered by Australia (as launch customer), France, NATO, Saudi Arabia, Singapore, South Korea, the United Arab Emirates, the United Kingdom, Spain and Canada.
Airbus boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Its LMXT is America’s next strategic tanker aircraft. Offering a proven airframe with distinct U.S. Air Force-only capabilities, LMXT provides the most advanced and complementary tanker to meet America’s immediate and long-term mission requirements.
Lockheed boasts a long-term earnings growth rate of 4.2%. The Zacks Consensus Estimate for LMT’s 2024 sales indicates an improvement of 2.4% from the 2023 reported figure.
Northrop Grumman (NOC - Free Report) : Its X-47B is a tailless, strike fighter-sized unmanned aircraft that can perform standard missions like aerial refueling. In April 2015, the X-47B once again made aviation history by successfully conducting the first-ever Autonomous Aerial Refueling (AAR) of an unmanned aircraft.
Northrop boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.
Price Movement
Shares of Boeing have lost 12.2% in the past year compared with the industry’s 9.7% decline.
Image: Bigstock
Boeing (BA) Wins Contract to Aid KC-135 Tanker Jet Program
The Boeing Company (BA) recently secured a contract involving its KC-135 refueling tanker aircraft. The award has been offered by the Defense Logistics Agency Aviation, Oklahoma City, OK.
Details of the Deal
Valued at $32.2 million, the contract is expected to be completed by Sep 30, 2027. Per the terms of the deal, Boeing will deliver KC-135 ruddevator booms.
Work related to this deal will be carried out in Missouri and Canada.
KC-135 Significance
Boeing’s KC-135 Stratotanker is an aerial refueling aircraft that provides core aerial refueling capability for the U.S. Air Force and has excelled in this role for more than 60 years. It also provides aerial refueling support to the U.S. Air Force, Navy, Marine Corps and allied nation aircraft.
The KC-135 is also capable of transporting litter and ambulatory patients using patient support pallets during aeromedical evacuations. Over the years, the KC-135 has been altered to do other jobs ranging from flying command post missions to reconnaissance.
The fact that two of its variants, KC-135R and KC-135T aircraft, continue to undergo life-cycle upgrades to expand their capabilities and improve reliability indicates the strong demand that this particular product line of Boeing has been enjoying over time. This must have been boosting the order flow for Boeing involving KC-135, like the latest one. Such order flows are projected to bolster BA’s top line in coming days.
Growth Prospects
With growing 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, developed nations like the United States and Europe have already been leading the defense market for some time now.
It is imperative to mention in this context that military aircraft, both manned and unmanned, form an integral constituent of a country’s defense products. Consequently, the refueling aircraft market has been booming lately with the rapid launch of manned and unmanned aerial systems, driven by increasing demand for combat aircraft and military spending of various countries.
To this end, it is imperative to mention that per a report published by the Global Market Insights firm, the global refueling aircraft market is expected to witness a CAGR of 2% during 2024-2032, with North America constituting a major portion of this market. Such projections boost growth prospects for Boeing, the largest aircraft manufacturer in the United States.
Impressively, KC-135 apart, Boeing builds KC-46 Pegasus air refueling tanker jet. Notably, KC-46A is the only multi-mission tanker that’s produced in America for the U.S. Air Force and its allies.
Opportunities for Peers
Aerospace stocks, other than Boeing, which are expected to gain from the growth of the refueling aircraft market have been discussed below.
Airbus (EADSY - Free Report) : Its A330 MRTT has become the world’s first tanker to be certified for automatic air-to-air refueling (A3R) boom operations in daylight, following a successful campaign in collaboration with the Republic of Singapore Air Force (RSAF). With 76 total aircraft sales as of August 2023, the A330 MRTT has been ordered by Australia (as launch customer), France, NATO, Saudi Arabia, Singapore, South Korea, the United Arab Emirates, the United Kingdom, Spain and Canada.
Airbus boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Its LMXT is America’s next strategic tanker aircraft. Offering a proven airframe with distinct U.S. Air Force-only capabilities, LMXT provides the most advanced and complementary tanker to meet America’s immediate and long-term mission requirements.
Lockheed boasts a long-term earnings growth rate of 4.2%. The Zacks Consensus Estimate for LMT’s 2024 sales indicates an improvement of 2.4% from the 2023 reported figure.
Northrop Grumman (NOC - Free Report) : Its X-47B is a tailless, strike fighter-sized unmanned aircraft that can perform standard missions like aerial refueling. In April 2015, the X-47B once again made aviation history by successfully conducting the first-ever Autonomous Aerial Refueling (AAR) of an unmanned aircraft.
Northrop boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.
Price Movement
Shares of Boeing have lost 12.2% in the past year compared with the industry’s 9.7% decline.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.