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Boeing Wins $227M Deal to Support F/A-18 and EA-18 Programs

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The Boeing Company (BA - Free Report) recently secured a $227-million contract for the procurement of main and nose landing gear assemblies in support of the F/A-18E/F and EA-18G aircraft.

The contract was awarded by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA. Work related to the deal will be executed in St. Louis, MI. Boeing is expected to complete the entire task by March 2023.

Brief Note on F/A-18 and E/A-18

Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all-weather, multirole fighter jet. The U.S. Navy’s tactical and air superiority aircraft is capable of performing virtually every mission in the tactical spectrum — air superiority, day/night strike with precision-guided weapons, fighter escort, close air support, suppression of enemy air defenses, maritime strike, reconnaissance, forward air control and tanker missions.

Boeing’s EA-18G Growler is the most advanced airborne electronic attack (AEA) platform, which operates from either an aircraft carrier or land bases. It provides tactical jamming and electronic protection to U.S. military forces and allies around the world.

What Favors Boeing?

Boeing successfully witnesses a steady inflow of major orders from Pentagon, led by its combat-proven aerospace programs and associated services. Furthermore, its expertise lies in programs that cater to a wide variety of aircraft components, repairs and modification work.

Earlier this year, the U.S. government’s fiscal 2020 defense budget included a spending plan of $57.7 billion on aircraft, reflecting a massive surge of 166% from the approved fiscal 2019 defense spending. If approved, this increased spending provision should usher in more contracts for the company’s Boeing Defense, Space & Security (BDS) segment, going ahead.

Interestingly, per Frost and Sullivan, the global combat aircraft market is expected to generate total revenues of $493.14 billion between 2017 and 2026. Such growth can be attributed to the rise in global threats, geopolitical instabilities and increased budget spending on defense. Such projections should continue to boost demand for Boeing’s F/A-18E/F and EA-18G fighter jets along with other combat aircraft programs.



Price Movement

In the past six months, shares of the company have gained 6.2% compared with the industry’s 8% growth.

Zacks Rank & Key Picks    

Boeing currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are L3Harris Technology Inc (LHX - Free Report) , Aerojet Rocketdyne Holdings, Inc. and Teledyne Technologies Inc. (TDY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

L3Harris’ long-term growth estimate currently stands at 8%. The company delivered average positive earnings surprise of 4.21% in the trailing four quarters.

Aerojet Rocketdyne’s long-term growth estimate is pegged at 5.5%. The company delivered average positive earnings surprise of 25.46% in the last four quarters.

Teledyne Technologies’ long-term growth estimate currently stands at 7.5%. The company delivered average positive earnings surprise of 9.26% in the trailing four quarters.

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