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Bell-Boeing Wins a Defense Contract to Supply V-22 Jets' Parts

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Bell-Boeing, a joint venture between The Boeing Company (BA - Free Report) and Bell Helicopter, a unit of Textron Inc. (TXT - Free Report) , recently secured a contract involving the V-22 Osprey aircraft. The award has been provided by the Defense Logistics Agency Aviation, Philadelphia, PA.

Details of the Deal

Valued at $13.6 million, the contract is estimated to be completed by May 10, 2025. Per the terms of the deal, Bell-Boeing will provide spare consumable and depot-level repairable parts for the V-22 aircraft.

The work related to this deal will be carried out in Texas and Pennsylvania.

Growing Jet Demand & V-22 Jets

A rapid increase in terror attacks across the globe has compelled nations to strengthen their arsenal and bump up their defense budget.  The United States is the largest exporter of defense equipment across the world and therefore, the country witnesses a steady flow of contracts for its combat-proven weaponry from both the Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation’s armaments, prominent jet manufacturers in the United States, like Textron and Boeing, frequently witness notable contract wins for combat-proven aircraft.

To this end, it is imperative to mention that Bell-Boeing’s primary product, V-22 Osprey, is a family of multi-mission, tiltrotor military aircraft with both vertical as well as short takeoff and landing capabilities. V-22 Osprey is designed to combine the functionality of a conventional helicopter with the long-range, high-speed cruise performance of a turboprop aircraft.

Considering these features of the aforementioned family of tiltrotors and the growing demand for military aircraft, V-22 enjoys solid demand in the military jet market across the globe. The latest contract win is an example of that.

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 is estimated to witness a CAGR of 5.23% in the 2024-2030 period. This will surely benefit major U.S. combat aircraft manufacturers like Textron, Boeing, Lockheed Martin (LMT - Free Report) and Northrop Grumman (NOC - Free Report) , with North America dominating this market space.

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. Of these, the F-35 is the company’s largest program.

LMT boasts a long-term earnings growth rate of 4.2%. The Zacks Consensus Estimate for LMT’s 2024 sales indicates an improvement of 3.2% from the 2023 reported figure.

On the other hand, Northrop is a renowned manufacturer of autonomous and manned aircraft like MQ-4C Triton and Global Hawk. These jets are used for battle management, strike and intelligence, surveillance and reconnaissance.

Northrop boasts a long-term earnings growth rate of 9.9%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.

Price Movement & Zacks Rank

Textron’s shares have risen 37.7% in the past year against the industry’s 8% decline. Boeing’s shares have lost 10.2% in the past year.

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Textron currently carries a Zacks Rank #3 (Hold), while Boeing carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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