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Boeing (BA) Wins $1.14B Deal for F/A-18 & EA-18G Programs
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The Boeing Company (BA - Free Report) recently secured a modification contract for its F/A-18 and EA-18G aircraft. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $1.14 billion, the contract is expected to be completed by April 2027. Per the terms of the deal, Boeing will be engaged in the production and delivery of 10 F/A-18F aircraft, as well as two F/A-18F and five F/A-18E aircraft. Boeing will also provide a technical data package, including the operation, maintenance, installation and training data to support F/A-18 and EA-18G sustainment efforts for the U.S. Navy.
The majority of work related to this deal will be performed at Hazelwood, MO and El Segundo, CA.
What’s Favoring Boeing?
As nations across the globe continue to strengthen their defense structures, spending on military arms and ammunition that boast technologically advanced features continues to increase manifold. This also includes increased investments in military aircraft that play a critical role in air warfare missions.
Boeing, a global leader in the development, production, maintenance and enhancement of manned and unmanned aircraft, stands to benefit from such increased demand.
To this end, it is imperative to mention that Boeing’s F/A-18 Block III Super Hornet, the backbone of the U.S. Navy, is a highly capable, affordable and available tactical aircraft. The EA-18G Growler, a variant of the F/A-18F, provides tactical jamming and electronic protection to the military around the world. In 2023, Boeing successfully delivered 22 F/A-18 models, from which one can gauge the solid demand that these jets enjoy in the combat aircraft market.
The latest contract win is another testament to that. Such contract wins tend to boost the company’s operating results from the Boeing Defense, Space & Security segment, which ended 2023 with a backlog of $59.01 billion.
Growth Prospects
Amid geopolitical tensions like the Russian invasion of Ukraine and the ongoing conflict in the Middle East, nations are rapidly augmenting their defense spending to procure more fighter jets. This, in turn, has been bolstering the prospects of the military aviation industry. Per a report by the Mordor Intelligence firm, the global military aviation market size is estimated to witness a CAGR of 5.23% in the 2024-2030 period.
Such projections indicate immense opportunities for Boeing to reap the benefits of military aviation market expansion. The company’s product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G and a few more.
Opportunities for Peers
Some other prominent defense majors involved in the manufacturing of military aircraft that are expected to gain from the military aviation market’s growth opportunities are Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Airbus Group (EADSY - Free Report) .
Northrop Grumman has built some of the world’s most advanced combat aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye. The segment witnessed a higher volume of restricted programs as well as the Triton and E-2 programs in 2023.
Northrop boasts a long-term (three-to five-years) 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.
Lockheed is one of the pioneers in the combat aircraft space, with its product portfolio constituting some of the most advanced military aircraft like the F-35, C-130, F-16, F-22 and a few more. On Jan 29, 2024, the Czech Republic government signed an agreement to procure 24 5th Generation F-35 Lightning II aircraft.
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.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived. The company delivered a total of 1,783 military aircraft as of Dec 31, 2023.
Airbus’ long-term earnings growth rate is 12.4%. The Zacks Consensus Estimate for 2024 sales implies growth of 9.5% from the 2023 reported figure.
Price Performance
In the past year, shares of BA have lost 11.5% compared with the industry’s 9.3% decline.
Image: Bigstock
Boeing (BA) Wins $1.14B Deal for F/A-18 & EA-18G Programs
The Boeing Company (BA - Free Report) recently secured a modification contract for its F/A-18 and EA-18G aircraft. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $1.14 billion, the contract is expected to be completed by April 2027. Per the terms of the deal, Boeing will be engaged in the production and delivery of 10 F/A-18F aircraft, as well as two F/A-18F and five F/A-18E aircraft. Boeing will also provide a technical data package, including the operation, maintenance, installation and training data to support F/A-18 and EA-18G sustainment efforts for the U.S. Navy.
The majority of work related to this deal will be performed at Hazelwood, MO and El Segundo, CA.
What’s Favoring Boeing?
As nations across the globe continue to strengthen their defense structures, spending on military arms and ammunition that boast technologically advanced features continues to increase manifold. This also includes increased investments in military aircraft that play a critical role in air warfare missions.
Boeing, a global leader in the development, production, maintenance and enhancement of manned and unmanned aircraft, stands to benefit from such increased demand.
To this end, it is imperative to mention that Boeing’s F/A-18 Block III Super Hornet, the backbone of the U.S. Navy, is a highly capable, affordable and available tactical aircraft. The EA-18G Growler, a variant of the F/A-18F, provides tactical jamming and electronic protection to the military around the world. In 2023, Boeing successfully delivered 22 F/A-18 models, from which one can gauge the solid demand that these jets enjoy in the combat aircraft market.
The latest contract win is another testament to that. Such contract wins tend to boost the company’s operating results from the Boeing Defense, Space & Security segment, which ended 2023 with a backlog of $59.01 billion.
Growth Prospects
Amid geopolitical tensions like the Russian invasion of Ukraine and the ongoing conflict in the Middle East, nations are rapidly augmenting their defense spending to procure more fighter jets. This, in turn, has been bolstering the prospects of the military aviation industry. Per a report by the Mordor Intelligence firm, the global military aviation market size is estimated to witness a CAGR of 5.23% in the 2024-2030 period.
Such projections indicate immense opportunities for Boeing to reap the benefits of military aviation market expansion. The company’s product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G and a few more.
Opportunities for Peers
Some other prominent defense majors involved in the manufacturing of military aircraft that are expected to gain from the military aviation market’s growth opportunities are Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Airbus Group (EADSY - Free Report) .
Northrop Grumman has built some of the world’s most advanced combat aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye. The segment witnessed a higher volume of restricted programs as well as the Triton and E-2 programs in 2023.
Northrop boasts a long-term (three-to five-years) 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.
Lockheed is one of the pioneers in the combat aircraft space, with its product portfolio constituting some of the most advanced military aircraft like the F-35, C-130, F-16, F-22 and a few more. On Jan 29, 2024, the Czech Republic government signed an agreement to procure 24 5th Generation F-35 Lightning II aircraft.
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.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived. The company delivered a total of 1,783 military aircraft as of Dec 31, 2023.
Airbus’ long-term earnings growth rate is 12.4%. The Zacks Consensus Estimate for 2024 sales implies growth of 9.5% from the 2023 reported figure.
Price Performance
In the past year, shares of BA have lost 11.5% compared with the industry’s 9.3% 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.