Lockheed Martin Corp’s (LMT - Free Report) Rotary and Mission Systems (RMS) business division recently secured a $28.9-million modification contract for the integration and delivery of AEGIS Baseline 9 Combat System. The contract has been awarded by the Naval Sea Systems Command, Washington, DC.
Per the terms, Lockheed Martin will provide technological upgrades, capability development and improvements, target recognition development, and radar engineering services. Work related to the deal will be executed in
Moorestown, NJ, and is expected to get completed by July 2019.
A Note on AEGIS Baseline 9
The Aegis Combat System is the world’s most advanced combat system and the only maritime ballistic defense system capable of simultaneously attacking land targets, submarines, and surface ships while protecting the fleet against aircraft, cruise and other ballistic missiles.
Its upgraded version – Baseline 9 – enables the crew members to track enemy missiles and aircraft with accuracy. The system further enhances the overall range and weapon capabilities of the vessel compared to its predecessors.
What Favors Lockheed Martin?
In recent times, heightened geo-political tensions and increasing terrorist activities across the globe are compelling nations to strengthen their military arsenal, with missile systems constituting an integral part of that. The United States, being the largest exporter of military weaponries worldwide, follows a similar strategy. This is evident from the allotment of a $1.7-billion investment plan to purchase 43 Aegis Ballistic Missile Defense systems, which is provisioned in the U.S. fiscal 2019 defense budget.
Additionally, per ASD Media BV, the global Missiles and Missile Defense Systems (MMDS) market value is projected to see a CAGR of 6% to $93 billion by 2027 from 2018. Such growth can be attributed to heavy and frequent investments made by developing nations like the United States, China, Russia and Israel in the development of next generation missiles and missile defense systems. Lockheed Martin, being Pentagon’s largest defense contractor, is expected to capture a significant size of this expanding market, thereby bolstering its dominant position in the defense space.
Lockheed Martin’s stock has declined 17.6% in the past year compared with the industry’s fall of 8.2%. The underperformance may have been caused by the intense competition the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically and internationally.
Zacks Rank & Other Key Picks
Lockheed Martin currently carries a Zacks Rank #2 (Buy).
A few other top-ranked companies in the same sector are AeroVironment, Inc. (AVAV - Free Report) , Teledyne Technologies Incorporated (TDY - Free Report) and The Boeing Company (BA - Free Report) .
While AeroVironment and Teledyne Technologies sport a Zacks Rank #1 (Strong Buy), Boeing carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AeroVironment came up with average positive earnings surprise of 257.01% in the last four quarters. The Zacks Consensus Estimate for fiscal 2019 earnings has increased 33.3% to $1.48 in the past 90 days.
Teledyne Technologies came up with average positive earnings surprise of 12.92% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 5.26% to $9.00 in the past 90 days.
Boeing delivered average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has moved up 4.40% to $18.09 in the past 90 days.
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