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Lockheed Wins $1B Deal to Support PAC-3 Missile Program
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Lockheed Martin Corp. (LMT - Free Report) recently secured a modification contract for supporting the Phased Array Tracking to Intercept Of Target (PATRIOT) Advanced Capability-3 (PAC-3) missile program. Work related to the deal is scheduled to be over by Oct 31, 2024.
Valued at $1.04 billion, the contract was awarded by the U.S. Army Contracting Command, Red Stone Arsenal, AL. Per the terms of the deal, Lockheed will provide incidental services, hardware, facilities, equipment, and all technical, planning, management, manufacturing, and testing to produce PAC-3 missiles.
Operations under the award will be carried out in Huntsville, AL; Camden, AK; Chelmsford, MA; Grand Prairie and Lufkin, TX.
PAC-3’s Significance
It is worth mentioning that PAC-3 is among Lockheed’s top-notch missile systems.
Apart from enjoying strong demand in the domestic market, PAC-3 has a solid international customer base. Evidently, Lockheed has ongoing PAC-3 programs for production and sustainment activities in Qatar, the Kingdom of Saudi Arabia, UAE, Japan, the Republic of Korea, Poland and Taiwan.
In the first quarter of 2020, increased sales volume of PAC-3 remained one of the primary growth drivers for Lockheed’s Missile and Fire Control (MFC) business unit, which achieved solid 10% year-over-year top-line growth.
So no doubt, the PAC-3 program remains a notable growth catalyst for Lockheed.
Missile Market Growth Prospects
Increasing geopolitical tensions along with a rapid rise in terrorism across the globe are prompting nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense is playing a pivotal role in the nation’s defense strategy.
To this end, the rocket and missile market is projected to grow from $55.5 billion in 2017 to $70 billion by 2022, at a CAGR of 4.74%, per a forecast made by Markets and Markets firm.
With the United States being one of the key players in the global defense space, such projections indicate a golden era for the nation’s premier defense contractors like Lockheed, Raytheon Technologies (RTX - Free Report) and Northrop Grumman (NOC - Free Report) .
As far as these stocks’ prospects within the nation are concerned, it is imperative to mention that the U.S. government’s fiscal 2021 defense budget includes a significant spending plan of $13.6 billion on missile defense, 126.6% higher than the previous budget plan. Such an increased spending provision should usher in more contracts for the nation’s varied range of missile programs.
Price Performance
In a year’s time, shares of Lockheed Martin have rallied about 19.7% against the industry’s decline of 15.2%.
CAE delivered average positive earnings surprise of 3.48% in the trailing four quarters. The company has a long-term earnings growth rate of 8%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Lockheed Wins $1B Deal to Support PAC-3 Missile Program
Lockheed Martin Corp. (LMT - Free Report) recently secured a modification contract for supporting the Phased Array Tracking to Intercept Of Target (PATRIOT) Advanced Capability-3 (PAC-3) missile program. Work related to the deal is scheduled to be over by Oct 31, 2024.
Valued at $1.04 billion, the contract was awarded by the U.S. Army Contracting Command, Red Stone Arsenal, AL. Per the terms of the deal, Lockheed will provide incidental services, hardware, facilities, equipment, and all technical, planning, management, manufacturing, and testing to produce PAC-3 missiles.
Operations under the award will be carried out in Huntsville, AL; Camden, AK; Chelmsford, MA; Grand Prairie and Lufkin, TX.
PAC-3’s Significance
It is worth mentioning that PAC-3 is among Lockheed’s top-notch missile systems.
Apart from enjoying strong demand in the domestic market, PAC-3 has a solid international customer base. Evidently, Lockheed has ongoing PAC-3 programs for production and sustainment activities in Qatar, the Kingdom of Saudi Arabia, UAE, Japan, the Republic of Korea, Poland and Taiwan.
In the first quarter of 2020, increased sales volume of PAC-3 remained one of the primary growth drivers for Lockheed’s Missile and Fire Control (MFC) business unit, which achieved solid 10% year-over-year top-line growth.
So no doubt, the PAC-3 program remains a notable growth catalyst for Lockheed.
Missile Market Growth Prospects
Increasing geopolitical tensions along with a rapid rise in terrorism across the globe are prompting nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense is playing a pivotal role in the nation’s defense strategy.
To this end, the rocket and missile market is projected to grow from $55.5 billion in 2017 to $70 billion by 2022, at a CAGR of 4.74%, per a forecast made by Markets and Markets firm.
With the United States being one of the key players in the global defense space, such projections indicate a golden era for the nation’s premier defense contractors like Lockheed, Raytheon Technologies (RTX - Free Report) and Northrop Grumman (NOC - Free Report) .
As far as these stocks’ prospects within the nation are concerned, it is imperative to mention that the U.S. government’s fiscal 2021 defense budget includes a significant spending plan of $13.6 billion on missile defense, 126.6% higher than the previous budget plan. Such an increased spending provision should usher in more contracts for the nation’s varied range of missile programs.
Price Performance
In a year’s time, shares of Lockheed Martin have rallied about 19.7% against the industry’s decline of 15.2%.
Zacks Rank & Key Pick
Lockheed currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector is CAE Inc. (CAE - Free Report) , which holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CAE delivered average positive earnings surprise of 3.48% in the trailing four quarters. The company has a long-term earnings growth rate of 8%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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