Lockheed (LMT) Wins $78M Deal to Support F-35 Jet Program
Lockheed (LMT) is going to conduct the integration of indigenous weapons into an F-35 air system.
Lockheed Martin Corp. LMT recently announced a modification contract to support the F-35 Lightning II Joint Strike Fighter Jet Program. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $77.9 million, the contract is expected to be completed by December 2025. Per the terms of the deal, Lockheed will conduct the integration of indigenous weapons into an F-35 jet-air system.
Work related to this contract will be carried out in Fort Worth, TX.
Growing Importance of F-35 Worldwide
The F-35 program enjoys a solid demand worldwide, as evidenced by its eight international program partners — the United States, the U.K., Italy, the Netherlands, Australia, Norway, Denmark and Canada. Additionally, it has six foreign military sales customers that are procuring and operating the F-35, namely Israel, Japan, South Korea, Poland, Belgium and Singapore. This reflects the growing importance of this family of jets globally.
As a result, Lockheed enjoys a consistent inflow of contracts for the production, delivery of associated spare parts as well as other deals concerning the F-35 jet program. For instance, in September 2021, the company clinched annualized contracts worth $6.6 billion for fiscal years 2021-2023, involving the sustainment of its global F-35 fleet, from the F-35 Joint Program Office. The contract also requires the company to build enterprise capacity for supporting the future fleet of more than 3,000 F-35 jets.
Such contract wins, including the latest one, are expected to boost Lockheed Martin's top-line performance in the days ahead.
Per a Research and Markets report, the global combat aircraft market is expected to witness a CAGR of 4% during the 2020-2025 time period. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Lockheed along with other combat jet manufacturers like Northrop Grumman NOC, Boeing BA and Textron TXT.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate of $5.93 by 11.8%. NOC stock has gained 47.2% in the past five years.
Boeing’s Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache, and V-22 Osprey.
Boeing incurred an adjusted loss of 60 cents per share in third-quarter 2021, which came in much wider than the Zacks Consensus Estimate of a loss of 17 cents. BA stock has risen 33.5% in the past five years.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron reported third-quarter 2021 adjusted earnings of 85 cents per share, which exceeded the Zacks Consensus Estimate of 75 cents by 13.3%. TXT stock has gained 52.3% in the past five years.
Price Movement and Zacks Rank
Shares of Lockheed Martin have lost 5.4% in the past year compared with the industry's decline of 36.2%.
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The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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