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Textron (TXT) Secures a Contract to Aid T-6C Training Aircraft

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Textron Inc.’s (TXT - Free Report) , business unit, Textron Aviation Defense, recently clinched a modification contract involving its T-6C aircraft. The award has been provided by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Details of the Deal

Valued at $29.3 million, the contract is projected to be completed by Sep 30, 2026. The latest modification provides Textron with exercise options for the procurement of support and supply of an additional three T-6C aircraft.
With this modification, the cumulative face value of the contract is $137 million.

Work related to this deal will be executed in Wichita, TX.

Why T-6C?

As nations across the global are aggressively pursuing to strengthen their defense force, military training aircraft play a critical role in shaping the future of global security and military preparedness.

It is imperative to mention in this context that Textron’s Beechcraft T-6C is the world’s premier military flight trainer. This jet’s low acquisition, operating and sustainment costs enable global air forces to fast-track the training of their fighter pilots, thereby effectively preparing them for real-world missions. Its state-of-the-art, all-digital, open-architecture glass cockpit offers crystal-clear visibility, necessary for completing complex missions.

No doubt such remarkable features of the T-6C training aircraft must have been fetching solid order flows for Textron, involving the production as well as upgradation of these jets. The latest contract win is a bright example of that.

The viability of this training aircraft can be further gauged from the fact that a global fleet of more than 1,000 Beechcraft T-6 Texan II aircraft has surpassed 5 million flight hours across 13 nations and two NATO flight schools since 2001, as of August 2023.

TXT’s Prospects in Military Training

In the modern era of warfare, factors like rapidly advancing technological development, competitive dynamics, increasing and unprecedented geopolitical threats, as well as significantly enhanced defense budgets from varied nations, especially emerging ones in recent times, have been bolstering the growth prospects of the military training aircraft market.  

This must have prompted the Mordor Intelligence firm to project an increase in the Military Training Aircraft Market size, from $2.76 billion in 2024 to $4.78 billion by 2030, at a CAGR of 9.6%.

Such an abounding growth prospect offered by the military training business should benefit TXT, considering the fact that its Textron Aviation Defense unit offers the largest and most successful flight training system in the world. From some of the world’s most beautiful settings to the most austere locations, this unit’s training solutions are completely mobile.

Notably, apart from T-6C, Textron Aviation Defense’s portfolio also includes the Beechcraft AT-6E Wolverine jet, which covers a wide-mission spectrum including training, manned Intelligence Surveillance and Reconnaissance as well as light precision attack.

How are Its Peers Doing?

TXT apart, other defense contractors that enjoy a significant presence in the Military Training Aircraft Market and are thus expected to gain from this market’s growth opportunities have been discussed below.

CAE Inc. (CAE - Free Report) : The company supports military forces by providing pilot, rear crew, sensor operator and maintenance crew training systems on a broad range of military aircraft platforms, including combat aircraft, lead-in fighter trainers, special mission platforms such as maritime patrol aircraft, tanker/transport aircraft, helicopters and remotely piloted aircraft. Following the acquisition of L3Harris Military, which included Link Simulation & Training, CAE is now the leading provider of F-16 pilot and maintenance training.

The company boasts a long-term earnings growth rate of 14.4%. The Zacks Consensus Estimate for CAE’s fiscal 2025 sales reflects a 3.8% improvement from the fiscal 2024 reported figure.

The Boeing Company (BA - Free Report) : The company delivers mission-ready aircrew and maintenance training solutions on all types of aircraft — rotorcraft, fixed-wing and space. Its T-7A Red Hawk is the only digital, next-generation trainer on the market that possesses military certification and meets modern, low-cost needs.

The company boasts a long-term earnings growth rate of 27.5%. The consensus estimate for BA’s 2024 sales reflects a 2.1% improvement from the 2023 reported figure.

Lockheed Martin (LMT - Free Report) : This company is yet another prominent defense contractor when it comes to fighter jets and their associated training. Its TF-50 trainer jet is a variant of the proven T-50 trainer platform, which is uniquely configured as an advanced trainer and light attack fighter. More than 2,500 students have been trained and over 3,750 test flights have been conducted on the T-50 platform.

The company boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for LMT’s 2024 sales reflects a 3.2% improvement from the 2023 reported figure.

Price Movement

In the past year, shares of Textron have surged 31.7% against the industry’s 9.1% decline.

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Zacks Rank

Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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