We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Boeing (BA) Secures $116.7M Deal to Aid Apache Helicopter
Read MoreHide Full Article
The Boeing Company (BA - Free Report) recently secured a contract to provide logistics support for its Apache helicopter. The award has been provided by the Army Contracting Command, Redstone Arsenal, AL.
Valued at $116.7 million, the contract is expected to be completed by Apr 30, 2025. The work related to this deal will be performed in Mesa, AZ.
What’s Favoring Boeing?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment worldwide. In this context, military helicopters that play a critical role in military missions have also been witnessing a significant rise in demand.
To this end, it is imperative to mention that Boeing’s AH-64 Apache is the backbone of the U.S. Army’s attack helicopter fleet and many other international defense forces. The U.S. Army has operated the A, D and E-model Apaches. The AH-64E is the latest and most advanced multirole combat helicopter in the world.
Impressively, there are more than 1,280 Apaches currently in operation globally, with over 5 million flight hours. In 2023, Boeing delivered a total of 77 AH-64 Apaches, including new and remanufactured. Such statistics reflect the solid demand that Boeing’s Apache helicopter enjoys in the combat helicopter market.
Growth Prospects
Rising military conflicts, terrorism, border disputes, territory invasions and violations have forced nations to increase their defense spending toward procuring combat-proven helicopters to enhance their aerial security. Per a report from the Mordor Intelligence firm, the global military rotorcraft market is likely to witness a CAGR of more than 4% during the 2024-2029 period.
Such solid market prospects provide strong growth opportunities for Boeing, with the company offering a solid portfolio for a handful of combat-proven helicopters. Apart from Apache, Boeing’s Defense Space & Security (BDS) unit includes helicopters like AH-6, H-47 Chinook and MH-139A Grey Wolf.
In 2023, Boeing delivered 20 CH-47 Chinook and two MH-139 Grey Wolf. The BDS segment accounted for 32% of the company’s total revenues. It ended 2023 with a backlog of $59 million, representing an 8.5% increase over 2022. Such a solid backlog, along with contract wins like the latest one, should significantly boost Boeing’s operating results in the coming years.
Opportunities for Peers
Other defense companies that may enjoy the perks of the expanding military rotorcraft market have been discussed below.
Textron (TXT - Free Report) : Textron’s Bell unit manufactures advanced military helicopters and provides parts and support services to the U.S. government and military customers outside the United States. It offers a robust portfolio of combat-proven helicopters like the Bell 360, V-280, AH-1Z, V-22 and many more. Bell, accounting for 23% of company’s total 2023 revenues, ended the year with a backlog of $4.78 billion.
TXT has a long-term (three to five years) earnings growth rate of 10.1%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Lockheed’s military helicopter portfolio contains programs like the Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters. In 2023, Lockheed delivered 63 helicopters.
LMT’s long-term earnings growth is pegged at 4.2%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 2.7% from that reported in 2023.
Airbus Group (EADSY - Free Report) : Airbus 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. In 2023, 52% of the Helicopters segment’s revenues came from the defense sector.
EADSY has a long-term earnings growth rate of 12.4%. The consensus estimate for 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Price Performance
In the past year, shares of BA have lost 12% compared with the industry’s 8.2% decline.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently has a Zacks Rank #5 (Strong Sell).
Image: Bigstock
Boeing (BA) Secures $116.7M Deal to Aid Apache Helicopter
The Boeing Company (BA - Free Report) recently secured a contract to provide logistics support for its Apache helicopter. The award has been provided by the Army Contracting Command, Redstone Arsenal, AL.
Valued at $116.7 million, the contract is expected to be completed by Apr 30, 2025. The work related to this deal will be performed in Mesa, AZ.
What’s Favoring Boeing?
Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment worldwide. In this context, military helicopters that play a critical role in military missions have also been witnessing a significant rise in demand.
To this end, it is imperative to mention that Boeing’s AH-64 Apache is the backbone of the U.S. Army’s attack helicopter fleet and many other international defense forces. The U.S. Army has operated the A, D and E-model Apaches. The AH-64E is the latest and most advanced multirole combat helicopter in the world.
Impressively, there are more than 1,280 Apaches currently in operation globally, with over 5 million flight hours. In 2023, Boeing delivered a total of 77 AH-64 Apaches, including new and remanufactured. Such statistics reflect the solid demand that Boeing’s Apache helicopter enjoys in the combat helicopter market.
Growth Prospects
Rising military conflicts, terrorism, border disputes, territory invasions and violations have forced nations to increase their defense spending toward procuring combat-proven helicopters to enhance their aerial security. Per a report from the Mordor Intelligence firm, the global military rotorcraft market is likely to witness a CAGR of more than 4% during the 2024-2029 period.
Such solid market prospects provide strong growth opportunities for Boeing, with the company offering a solid portfolio for a handful of combat-proven helicopters. Apart from Apache, Boeing’s Defense Space & Security (BDS) unit includes helicopters like AH-6, H-47 Chinook and MH-139A Grey Wolf.
In 2023, Boeing delivered 20 CH-47 Chinook and two MH-139 Grey Wolf. The BDS segment accounted for 32% of the company’s total revenues. It ended 2023 with a backlog of $59 million, representing an 8.5% increase over 2022. Such a solid backlog, along with contract wins like the latest one, should significantly boost Boeing’s operating results in the coming years.
Opportunities for Peers
Other defense companies that may enjoy the perks of the expanding military rotorcraft market have been discussed below.
Textron (TXT - Free Report) : Textron’s Bell unit manufactures advanced military helicopters and provides parts and support services to the U.S. government and military customers outside the United States. It offers a robust portfolio of combat-proven helicopters like the Bell 360, V-280, AH-1Z, V-22 and many more. Bell, accounting for 23% of company’s total 2023 revenues, ended the year with a backlog of $4.78 billion.
TXT has a long-term (three to five years) earnings growth rate of 10.1%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Lockheed Martin (LMT - Free Report) : Lockheed’s military helicopter portfolio contains programs like the Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters. In 2023, Lockheed delivered 63 helicopters.
LMT’s long-term earnings growth is pegged at 4.2%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 2.7% from that reported in 2023.
Airbus Group (EADSY - Free Report) : Airbus 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. In 2023, 52% of the Helicopters segment’s revenues came from the defense sector.
EADSY has a long-term earnings growth rate of 12.4%. The consensus estimate for 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Price Performance
In the past year, shares of BA have lost 12% compared with the industry’s 8.2% decline.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.