The Boeing Company (BA - Free Report) recently secured a $36.8-million contract for providing 82 end item equipment for supporting F/A-18 aircraft’s Return-to-Readiness Initiative. The contract was awarded by the Naval Air Warfare Center Aircraft Division, Lakehurst, NJ.
Work related to this deal will be performed in St. Louis, MI, and is expected to get completed by March 2021.
A Brief Note on F/A-18 Aircraft
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all weather multirole fighter jet, capable of performing day/night striking with precision-guided weapons, fighter escort, suppression of enemy air defenses, maritime strike, reconnaissance and forward air control and tanker missions.
Owing to widespread geopolitical tensions across the globe, Boeing has been witnessing strong demand for its fighter aircraft and major aerospace programs, including the F-18 program. Evidently, the company's backlog for its defense business stood at $57 billion toward the end of 2018, witnessing a year-over-year increase of 30%. Significant orders acquired by the company for its F/A-18 program contributed to this backlog growth. Inevitably, Boeing's F/A-18 program is anticipated to witness considerable growth in 2019 as well, through contract wins like the latest one. Such deals in turn will drive the company's top line.
Interestingly, the proposed fiscal 2020 defense budget that includes a spending plan of $57.7 billion on aircraft reflects a massive increase of 166% from the approved spending for fiscal 2019. If approved, this increased spending provision should usher in more contracts for Boeing’s F/A-18 aircraft program, going ahead.
Shares of Boeing have rallied 23.8% in the past 12 months against the industry’s decline of 1.4%.
Zacks Rank & Key Picks
Boeing currently carries Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Spirit Aerosystems Holdings (SPR - Free Report) , AeroVironment, Inc. (AVAV - Free Report) and Heico Corporation (HEI - Free Report) .
While Spirit Aerosystems sports a Zacks Rank #1 (Strong Buy), Heico and AeroVironment carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Spirit Aerosystems’ long-term growth estimates currently stand at 7.8%. The Zacks Consensus Estimate for 2019 earnings has risen 3.7% to $7.56 in the past 90 days.
Heico Corporation came up with average positive earnings surprise of 4.8% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 2.9% to $2.14 in the past 90 days.
AeroVironment’ long-term growth estimates currently stand at 25%. The Zacks Consensus Estimate for 2019 earnings has risen 16.67% to $1.75 in the past 90 days.
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