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Boeing (BA) Wins $371M Contract to Support F-15 Platform
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Aerospace giant The Boeing Company (BA - Free Report) has clinched a modification contract for providing performance-based supply chain support for the F-15 platform. Work under this deal is scheduled to be over by Mar 14, 2022.
Valued at $371.2 million, this contract has been awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. Boeing plans to utilize fiscal 2017 through 2022 defense working capital funds to complete this five-year base contract. The company will carry out work under this project at Missouri and Georgia.
A Brief Note on F-15
Boeing’s F-15Strike Eagle is a twin-engine, all weather tactical fighter aircraft. Its proven design is undefeated in air-to-air combat, with more than 100 aerial combat victories.
In Oct 2015, Boeing was selected by the U.S. Air Force as the prime contractor for its Eagle Passive Active Warning Survivability System (EPAWSS) program, which was initially valued at $4 billion. The program was developed to counter threats and protect air crew at an advanced level and aimed at upgrading F-15 aircraft. Without doubt, this reflects the popularity that this particular jet enjoys in the U.S.
Why Boeing?
Boeing is one of the largest aerospace and defense contractors, with its defense business standing out among peers on virtue of its broadly diversified programs, strong order bookings and backlog. With rising geo-political tensions across the globe, the company’s Defense, Space & Security segment witnessed healthy revenues and margins during 2016, apart from making substantial progress on critical program milestones, including the first flight of its T-X trainer aircraft.
In particular, among other defense equipment, the company’s forte has been combat-proven aircraft. So far, Boeing has manufactured more than 1,600 of the aircraft for six countries and none of them plan to retire the F-15, thereby indicating this jet’s enhanced sustainability. In 2016, the company delivered 15 F-15s, up 25% from the year-ago tally.
With its proven expertise in aerospace programs, the company has been gaining a huge number of contracts from the Pentagon. In recent times, Boeing secured a modification contract worth $3.3 billion from the U.S. Army for supplying lot 7-11 of AH-64E Apache attack helicopters to the government of Saudi Arabia.
Meanwhile, President Donald Trump’s proposal to boost the nation’s defense budget by 10% in 2018 from 2016 is likely to benefit defense biggies like Boeing.
Price Performance
Boeing gained about 36.3% in the last one year, outperforming the Zacks categorized Aerospace/Defense industry’s gain of 27.7%. This might have been triggered by the rising international demand for Boeing’s defense products, in particular for rotorcraft, commercial derivatives, fighters, satellites and services in the Asia Pacific as well as Gulf nations, as they have been strengthening their defense budgets of late. Moreover, the company’s earnings are expected to grow 13% over the next five years, indicating further upside for this stock. However, the company has to face strong competition from peers like Lockheed Martin Corp. (LMT - Free Report) , General Dynamics Corp. (GD - Free Report) and Airbus Group SE (EADSY - Free Report) .
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Boeing (BA) Wins $371M Contract to Support F-15 Platform
Aerospace giant The Boeing Company (BA - Free Report) has clinched a modification contract for providing performance-based supply chain support for the F-15 platform. Work under this deal is scheduled to be over by Mar 14, 2022.
Valued at $371.2 million, this contract has been awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. Boeing plans to utilize fiscal 2017 through 2022 defense working capital funds to complete this five-year base contract. The company will carry out work under this project at Missouri and Georgia.
A Brief Note on F-15
Boeing’s F-15Strike Eagle is a twin-engine, all weather tactical fighter aircraft. Its proven design is undefeated in air-to-air combat, with more than 100 aerial combat victories.
In Oct 2015, Boeing was selected by the U.S. Air Force as the prime contractor for its Eagle Passive Active Warning Survivability System (EPAWSS) program, which was initially valued at $4 billion. The program was developed to counter threats and protect air crew at an advanced level and aimed at upgrading F-15 aircraft. Without doubt, this reflects the popularity that this particular jet enjoys in the U.S.
Why Boeing?
Boeing is one of the largest aerospace and defense contractors, with its defense business standing out among peers on virtue of its broadly diversified programs, strong order bookings and backlog. With rising geo-political tensions across the globe, the company’s Defense, Space & Security segment witnessed healthy revenues and margins during 2016, apart from making substantial progress on critical program milestones, including the first flight of its T-X trainer aircraft.
In particular, among other defense equipment, the company’s forte has been combat-proven aircraft. So far, Boeing has manufactured more than 1,600 of the aircraft for six countries and none of them plan to retire the F-15, thereby indicating this jet’s enhanced sustainability. In 2016, the company delivered 15 F-15s, up 25% from the year-ago tally.
With its proven expertise in aerospace programs, the company has been gaining a huge number of contracts from the Pentagon. In recent times, Boeing secured a modification contract worth $3.3 billion from the U.S. Army for supplying lot 7-11 of AH-64E Apache attack helicopters to the government of Saudi Arabia.
Meanwhile, President Donald Trump’s proposal to boost the nation’s defense budget by 10% in 2018 from 2016 is likely to benefit defense biggies like Boeing.
Price Performance
Boeing gained about 36.3% in the last one year, outperforming the Zacks categorized Aerospace/Defense industry’s gain of 27.7%. This might have been triggered by the rising international demand for Boeing’s defense products, in particular for rotorcraft, commercial derivatives, fighters, satellites and services in the Asia Pacific as well as Gulf nations, as they have been strengthening their defense budgets of late. Moreover, the company’s earnings are expected to grow 13% over the next five years, indicating further upside for this stock. However, the company has to face strong competition from peers like Lockheed Martin Corp. (LMT - Free Report) , General Dynamics Corp. (GD - Free Report) and Airbus Group SE (EADSY - Free Report) .
Zacks Rank
Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>