Lockheed Martin Corp. (LMT - Free Report) recently secured a $175-million contract to provide engineering, testing, product and ancillary support for updating the Long-Range Anti-Ship Missile (LRASM) components and systems. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Majority of the work related to the deal will be performed in Orlando, FL, and Wayne, NJ. The work is scheduled to be completed in November 2022.
Rising Demand of the LRASM Technology
Lockheed Martin’s LRASM is a precision-guided, anti-ship missile that integrates an enhanced digital anti-jam Global Positioning System to detect and destroy specific targets among a group of ships at sea. The upgrade of the LRASM technology has led to reduced dependence on ISR
platforms, network links and GPS navigation in aggressive electronic warfare environments. Moreover, the LRASM provides range, survivability and lethality unlike other Anti-Ship Missile systems. As a result, the LRASM is increasingly becoming popular among the U.S. Air Force and Navy.
What Favors Lockheed Martin?
In recent times, heightened geo-political tensions looming across the globe, especially in the Middle East, and rapid modernization of China’s naval fleet have compelled the United States to significantly modernize its naval defense. The political unrest in Europe, led by tensed relations between Russia and eastern European nations, such as Ukraine, Poland and Romania, has also increased the demand for missile system in the region.
Such widespread unrest has set the stage for Lockheed Martin to acquire increasing number of global contracts related to missile defense systems. The latest contract win is a testimony to that.
Interestingly, per Market Research Engine, the global anti-ship missile defense system market is expected to reach $14 billion by 2024 from 2018, at a CAGR of 5.56%. The projection is primarily driven by the advancement in underwater warfare technology and increasing investments in the same. This, in turn, will increase the demand for anti-ship missile defense system along with its components and related technical services. Lockheed Martin, being a major missile maker on a global scale, is likely to benefit from such favorable projections.
Shares of the company have gained 20.7% in the past 12 months compared with the industry’s growth of 6%.
Zacks Rank & Key Picks
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same industry are Wesco Aircraft Holdings (WAIR - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and Leidos Holdings (LDOS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wesco Aircraft’s long-term growth estimates currently stand at 12%. The Zacks Consensus Estimate for 2019 earnings has increased 3.7% to 84 cents in the past 60 days.
Northrop Grumman came up with an average positive earnings surprise of 18.50% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 0.62% to $19.42 in the past 60 days.
Leidos Holdings delivered an average positive earnings surprise of 6.81% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 0.43% to $4.60 in the past 60 days.
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