Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business division recently secured a $512-million deal under the foreign military sales (FMS) program to manufacture eight F-16 Block 70 aircraft for the Republic of Bulgaria. The contract was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.
Work related to the deal will be completed in Ft. Worth, TX, and Greenville, SC, by Jan 31, 2027.
F-16 Block 70 Aircraft & FMS
The F-16 Block 70 and Block 72 aircraft variants combine capability upgrades, most notably the advanced Active Electronically Scanned Array (AESA) radar, with new avionics architecture and structural upgrades to extend the structural life of the aircraft. Nations like the United States, Belgium, Israel, South Korea, Poland, Portugal, Turkey and others have deployed this aircraft in their arsenal.
At the end of 2019, Greece confirmed to upgrade 84 of its earlier-generation F-16s to the advanced F-16 Block 70 aircraft. Further, Bahrain and Slovakia have been recent additions to Lockheed Martin's F-16 Block 70 portfolio. These show the solid demand enjoyed by the company for these jets in foreign lands.
Lockheed Martin’s Prospects in Bulgaria
Coming to Bulgaria, the comprehensive F-16 Block 70 package for this nation includes training for pilots and ground crew, logistics, support equipment and weapons for all operational needs, without any additional hidden costs. In this regard, it is imperative to mention that NATO leaders, in 2014, agreed to spend at least 2% of GDP on defense by 2024 and Bulgaria has achieved this goal last year itself by spending up to 3.25% of GDP.
The country stands second only to the United States in terms of the size of the economy (as per a report by the Washington Post). This should make us optimistic about witnessing more order flows from this nation, like the latest one, for Lockheed Martin, as it is a prominent defense major.
Lockheed Martin’s stock has gained 18.1% in the past year against the industry’s 34.2% decline.
Zacks Rank & Key Picks
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the same space are Huntington Ingalls Industries, Inc. (HII - Free Report) , Northrop Grumman Corp. (NOC - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) , each currently carrying a Zacks Rank #2 (Buy).
Huntington Ingalls delivered a positive earnings surprise of 2.83% in the last reported quarter. The Zacks Consensus Estimate for 2020 earnings indicates an annual improvement of 45.2%.
Northrop delivered average positive earnings surprise of 13.12% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings implies an annual improvement of 8.6%.
Leidos Holdings delivered average four-quarter earnings beat of 11.19%. The Zacks Consensus Estimate for 2020 earnings calls for an annual improvement of 9.3%.
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