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Northrop Grumman (NOC) Wins $86M Deal to Support Triton UAS

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Northrop Grumman Corp.’s (NOC - Free Report) business unit, Northrop Grumman Systems recently secured a modification contract to offer sustainment, engineering, logistics and test support for MQ-4C Triton aircraft mission control and operator training systems. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD

Valued at $86.2 million, the contract is scheduled to be completed by March 2021. The majority of the task will be carried out in Patuxent River, MD and Jacksonville, FL.

Advantages of Triton UAS Air Vehicles

Northrop Grumman’s MQ-4C Triton UAS is equipped to provide real-time intelligence, surveillance and reconnaissance (ISR) over vast ocean and coastal regions. The system is also equipped with a robust mission sensor suite that provides 360-degree coverage on all sensors, ensuring unprecedented maritime domain awareness for the U.S. Navy.

Triton UAS supports a wide range of missions including maritime ISR patrol, signals intelligence, search and rescue, and communications relay.

Northrop Grumman’s Prospects

Cost-effectiveness compared with manned aircraft and zero mortality, which UAS offers, has been bolstering demand for military drones. This, in turn, has been driving demand for Triton, a next-generation UAS.

During the 2019-2025 period, the global unmanned aerial vehicle (UAV) market is anticipated to see CAGR of 15.5% to $45.8 billion (per a report by Markets and Markets research firm). Notably, rise in the procurement of military UAVs by defense forces worldwide is one of the most significant factors, which might provide a boost to the UAV market.

To date, North America remains the largest market for UAV, driven by increasing use for border and maritime surveillance activities, particularly in the United States and Canada.  

With Northrop Grumman being a prominent defense major in the United States and an expert UAV manufacturer, the aforementioned projections for the market should boost this defense prime’s growth substantially.

Price Performance

In a year’s time, shares of Northrop Grumman have rallied about 16.2% against the industry’s 25.8% decline.

Zacks Rank & Other Stocks to Consider   

Northrop Grumman has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same sector are L3Harris Technology Inc (LHX - Free Report) , Leidos Holdings, Inc. (LDOS - Free Report) and AeroVironment, Inc. (AVAV - Free Report) , each of which carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

L3Harris’ earnings estimate for 2020 indicates an annual improvement of 15.2%. The company surpassed the Zacks Consensus Estimate for earnings in the last four quarters, the average beat being 5.28%.

Leidos’ earnings estimate for 2020 indicates an annual improvement of 8.7%. The company surpassed the Zacks Consensus Estimate for earnings in the last four quarters, the average beat being 11.19%.

AeroVironment’s earnings estimate for fiscal 2020 indicates an annual improvement of 1.7%. The company surpassed the Zacks Consensus Estimate for earnings in the last four quarters, the average beat being 5.72%.

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