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Lockheed Wins $647M Deal to Produce & Support Trident II D5 Missiles

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Key Takeaways

  • Lockheed Martin wins a $647M deal for Trident II D5 missile production and systems support.
  • The Trident II D5 missile remains deployed on Ohio-class and UK Vanguard-class submarines.
  • LMT's Missiles and Fire Control unit drives global growth with proven missile systems.

Lockheed Martin Corp. (LMT - Free Report) recently secured a modification to a previously awarded contract. The deal is for the production of Trident II D5 missiles and support for deployed systems. The deal has been awarded by the Strategic Systems Programs, Washington, D.C. This deal also benefits a Foreign Military Sale to the United Kingdom.

The deal is valued at nearly $647.1 million and has optional line items that could increase the amount to $745.7 million if exercised. The contract is projected to be completed by Sept. 30, 2030, and the work will be carried out at multiple locations across the United States.

LMT’s Leadership in Developing Missile Systems

Lockheed Martin has a long history of successfully providing its customers with missiles and missile systems that are affordable, proven and in production. The company produced strategic missile systems, which include intercontinental-range ballistic missiles that act as strategic deterrents. 

LMT's Missiles and Fire Control business segment is well-known for developing high-performance missiles. The unit also conducts business in more than 50 countries worldwide. Some of its important programs include Patriot Advanced Capability-3 and Terminal High Altitude Area Defense. Its most notable missiles include the Long-Range Anti-Ship Missile, the Precision Strike Missile and several more.

LMT's Trident II D5 is a highly accurate submarine-launched ballistic missile weapon. The missile is currently deployed on Ohio-class and UK Vanguard-class submarines and will continue to be in service until the 2040s. The Trident II D5 missile is part of the sea-based leg of the U.S. deployed strategic deterrent Triad, which has long been regarded as the most survivable.

Growth Potential

Rising regional conflicts in several parts of the world have driven nations to strengthen their defensive capabilities. As missiles make up a substantial portion of a country's defense arsenal, governments are spending heavily on modern missile systems for deterrence and defense.

This is likely to have led the Mordor Intelligence firm to predict that the missile and missile defense systems market will witness a CAGR of 4.97% during the 2025-2030 period. Such growth potential in the missile and missile defense systems industry should benefit Lockheed Martin, which manufactures various combat-proven missile systems.

Other defense companies that are likely to enjoy the perks of the expanding missile and missile defense system market have been discussed below:

The Boeing Company (BA - Free Report) : The company provides air and missile defense systems to the United States, its allies and international partners. Its offerings include the Avenger, Aegis Ballistic Missile Defense and Ground-Based Midcourse Defense.

BA boasts a long-term (three to five years) earnings growth rate of 17.9%. The Zacks Consensus Estimate for 2025 sales stands at $85.66 billion, which calls for an increase of 28.8%.

General Dynamics Corp. (GD - Free Report) : The company's business unit Mission Systems has a 70-year history of providing complete life-cycle support for strategic nuclear ballistic missile guidance. The company's distinctive knowledge and proven capabilities are illustrated by its support for the U.S. Air Force's intercontinental ballistic missile and Navy submarine-launched ballistic missile strategic weapons systems.

GD has a long-term earnings growth rate of 10.7%. The Zacks Consensus Estimate for 2025 sales is pegged at $51.19 billion, which suggests an increase of 7.3%.

RTX Corporation (RTX - Free Report) : The company is well-known for its missile defense systems, which include the Patriot and SM-6. The company also boasts a number of combat-proven missiles in its line of products, including the Tomahawk Cruise Missile, Joint Strike Missile, Naval Strike Missile and many others.

RTX’s long-term earnings growth rate is 9.1%. The Zacks Consensus Estimate for 2025 sales stands at $85.69 billion, which indicates a rise of 6.1%.

LMT Stock Price Movement

In the past month, Lockheed Martin shares have rallied 9.9% compared with the industry’s 3.5% growth.

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LMT’s Zacks Rank

Lockheed Martin 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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