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BAE Systems Secures a Contract to Support USS Forrest Sherman
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Key Takeaways
BAE Systems won a $117.7M contract to maintain, modernize and repair USS Forrest Sherman.
Contract covers labor, equipment, testing and QA for the ship's FY2026 depot modernization.
The work will be done mainly in Norfolk, VA, with completion expected by August 2027.
BAE Systems Inc. (BAESY - Free Report) recently clinched a modification contract to support the maintenance, modernization and repair of the USS Forrest Sherman (DDG 98). The contract covers all required labor, equipment, testing, facilities and quality assurance activities to execute the ship’s fiscal 2026 depot modernization period.
Valued at $117.7 million, the contract is expected to be completed in August 2027. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
The majority of the work related to the contract will be carried out in Norfolk, VA.
Growth Prospects for BAESY
According to a report from the Mordor Intelligence firm, nations across the globe are fortifying their defense spending on military weapons and arsenals as they look to strengthen their defense capabilities. This also includes augmented spending on navy ships for enhanced sea warfare capabilities. Mordor Intelligence also forecasts that the naval vessels market will witness a compound annual growth rate of 6.46% during the 2025-2030 period.
Such increased spending tends to benefit BAE Systems as its Platforms & Services business manufactures and upgrades combat vehicles, weapons and munitions and provides naval ship repair.
Such features may have resulted in multiple contract wins for BAE Systems.
Opportunities for Other Defense Stocks
Some other defense players that can gain from the expanding naval vessel market are discussed below.
Lockheed Martin (LMT - Free Report) : Lockheed’s Rotary and Mission Systems unit supports integrated warfare systems and sensors programs such as the AEGIS Combat System, the Littoral Combat Ship and Multi-Mission Surface Combatant for the U.S. Navy and other allies.
LMT’s long-term (three-to five-year) earnings growth rate is 11.9%. The Zacks Consensus Estimate for 2025 sales implies growth of 4.7% from the prior-year figure.
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls’ Ingalls Shipbuilding segment constructs amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters for the U.S. Navy and boasts a strong portfolio of products. The Newport News segment is involved in the design and construction of nuclear-powered aircraft carriers and submarines.
HII’s long-term earnings growth rate is 13.8%. The Zacks Consensus Estimate for 2025 sales implies growth of 4.7% from the prior-year figure.
General Dynamics (GD - Free Report) : General Dynamics’ Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy.
GD’s long-term earnings growth rate is 13.1%. The Zacks Consensus Estimate for 2025 sales implies growth of 8.9% from the prior-year figure.
Price Performance
In the past year, shares of BAE Systems have gained 51.1% compared with the industry’s 21.3% growth.
Image: Bigstock
BAE Systems Secures a Contract to Support USS Forrest Sherman
Key Takeaways
BAE Systems Inc. (BAESY - Free Report) recently clinched a modification contract to support the maintenance, modernization and repair of the USS Forrest Sherman (DDG 98). The contract covers all required labor, equipment, testing, facilities and quality assurance activities to execute the ship’s fiscal 2026 depot modernization period.
Valued at $117.7 million, the contract is expected to be completed in August 2027. The award has been provided by the Naval Sea Systems Command, Washington, D.C.
The majority of the work related to the contract will be carried out in Norfolk, VA.
Growth Prospects for BAESY
According to a report from the Mordor Intelligence firm, nations across the globe are fortifying their defense spending on military weapons and arsenals as they look to strengthen their defense capabilities. This also includes augmented spending on navy ships for enhanced sea warfare capabilities. Mordor Intelligence also forecasts that the naval vessels market will witness a compound annual growth rate of 6.46% during the 2025-2030 period.
Such increased spending tends to benefit BAE Systems as its Platforms & Services business manufactures and upgrades combat vehicles, weapons and munitions and provides naval ship repair.
Such features may have resulted in multiple contract wins for BAE Systems.
Opportunities for Other Defense Stocks
Some other defense players that can gain from the expanding naval vessel market are discussed below.
Lockheed Martin (LMT - Free Report) : Lockheed’s Rotary and Mission Systems unit supports integrated warfare systems and sensors programs such as the AEGIS Combat System, the Littoral Combat Ship and Multi-Mission Surface Combatant for the U.S. Navy and other allies.
LMT’s long-term (three-to five-year) earnings growth rate is 11.9%. The Zacks Consensus Estimate for 2025 sales implies growth of 4.7% from the prior-year figure.
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls’ Ingalls Shipbuilding segment constructs amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters for the U.S. Navy and boasts a strong portfolio of products. The Newport News segment is involved in the design and construction of nuclear-powered aircraft carriers and submarines.
HII’s long-term earnings growth rate is 13.8%. The Zacks Consensus Estimate for 2025 sales implies growth of 4.7% from the prior-year figure.
General Dynamics (GD - Free Report) : General Dynamics’ Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy.
GD’s long-term earnings growth rate is 13.1%. The Zacks Consensus Estimate for 2025 sales implies growth of 8.9% from the prior-year figure.
Price Performance
In the past year, shares of BAE Systems have gained 51.1% compared with the industry’s 21.3% growth.
Image Source: Zacks Investment Research
Zacks Rank
BAE Systems currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.