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Lockheed Secures a $139M Deal to Support Stinger Missile Program
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Lockheed Martin Corp. (LMT - Free Report) recently clinched a modification contract to supply fuse/warhead body assemblies for Stinger missiles. The award has been offered by the Army Contracting Command, Newark, NJ.
Valued at $139 million, the contract is expected to be completed by Nov. 30, 2027.
LMT’s Place in Missile Market
Lockheed Martin, a renowned manufacturer of stealth and agile military aircraft, is also a well-known producer of combat-proven missiles that are being used by nations across the globe. For instance, its multipurpose Hellfire II missile has been successfully integrated with attack helicopters in the United States and many allied fleets, with over 10,000 of these missiles, have been successfully fired in combat.
The company also manufactures other missiles like Joint Air-to-Surface Standoff Missile (JASSM) and Long Range Anti-Ship Missile (LRASM). Notably, in October 2024, LMT secured a contract to increase the production capacity of JASSM and LRASM in support of critical weapons capacity for the United States and its allies.
Earlier, in 2022, Lockheed Martin expanded its existing production facilities by adding 225,000-square-foot to support increased production capacity for the PAC-3 Missile Segment Enhancement (“MSE”), the world’s most advanced air defense missile. LMT is currently producing more than 300 PAC-3 MSEs each year and expects to increase the figure to 500.
Moreover, the company boasts more than 65 years of experience partnering with the U.S. Air Force on Intercontinental Ballistic Missiles (“ICBM”) and the Reentry Vehicles they launch. This includes delivering more than 700 missiles and 3,000 re-entry vehicles to the Air Force and providing next-generation support equipment to enable LMT’s customers to test and maintain ICBMs with modern technology.
These statistics indicate the solid demand that Lockheed Martin’s missiles and associated parts, such as missile fuses and warheads, enjoy in the global missile market. The latest contract win is a bright example of that.
LMT’s Growth Prospects
Rapidly increasing geopolitical tensions worldwide and heightened regional conflicts in different parts of the globe, like the Middle East, Eastern Europe and the South China Sea over the last decade, have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily these days in advanced missile systems for deterrence and defense. This, in turn, has been boosting the demand for technologically advanced missile systems.
This must have prompted the Mordor Intelligence firm to project that the global missiles and missile defense system market will witness a CAGR of 5% over the 2024-2029 period. Such growth opportunities offered by the aforementioned market should bode well for Lockheed, with its product portfolio consisting of numerous combat-proven missiles that are being bought by multiple nations worldwide.
Notably, its Missiles and Fire Control (“MFC”) business segment provides air and missile defense systems as well as tactical missiles and air-to-ground precision strike weapon systems like the Terminal High Altitude Area Defense (THAAD) air and missile defense program, Precision Strike Missile (PrSM) and Multiple Launch Rocket System (MLRS). This unit registered a solid sales improvement of 8% year over year to $3.18 billion in the third quarter of 2024, buoyed by the production ramp-up of Guided Multiple Launch Rocket Systems and LRASM programs.
Looking ahead, solid order flows like the latest one should enable LMT’s MFC unit to register a similar solid sales improvement trend in the coming years, backed by the strong growth trend offered by the global missile and missile defense system market, as mentioned above.
Opportunities for Peers
LMT apart, defense contractors that are likely to benefit from the growth opportunities offered by the missiles and missile defense system market are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales implies growth of 5.3% from the prior-year reported figure.
RTX Corp (RTX - Free Report) : It offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missiles, Advanced Medium-Range Air-to-Air Missiles, Evolved Seasparrow Missiles, the Tomahawk cruise missile and a few more. To keep up with its growing demand for a wide variety of missiles, RTX broke ground with a $115 million worth, 26,000-square-foot expansion of its Redstone Raytheon Missile Integration Facility in April 2024.
RTX boasts a long-term earnings growth rate of 10.2%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 7.2% from the 2023 reported figure.
The Boeing Company (BA - Free Report) : For almost 25 years, Boeing has been providing the United States, its allies and international partners with air and missile defense systems. The Avenger Air Defense System, Ground-Based Midcourse Defense and a few additional missiles are among its product offerings.
BA boasts a long-term earnings growth rate of 19.3%.
Price Movement
In the past year, shares of Lockheed have surged 20.5% against the industry’s decline of 1.7%.
Image: Bigstock
Lockheed Secures a $139M Deal to Support Stinger Missile Program
Lockheed Martin Corp. (LMT - Free Report) recently clinched a modification contract to supply fuse/warhead body assemblies for Stinger missiles. The award has been offered by the Army Contracting Command, Newark, NJ.
Valued at $139 million, the contract is expected to be completed by Nov. 30, 2027.
LMT’s Place in Missile Market
Lockheed Martin, a renowned manufacturer of stealth and agile military aircraft, is also a well-known producer of combat-proven missiles that are being used by nations across the globe. For instance, its multipurpose Hellfire II missile has been successfully integrated with attack helicopters in the United States and many allied fleets, with over 10,000 of these missiles, have been successfully fired in combat.
The company also manufactures other missiles like Joint Air-to-Surface Standoff Missile (JASSM) and Long Range Anti-Ship Missile (LRASM). Notably, in October 2024, LMT secured a contract to increase the production capacity of JASSM and LRASM in support of critical weapons capacity for the United States and its allies.
Earlier, in 2022, Lockheed Martin expanded its existing production facilities by adding 225,000-square-foot to support increased production capacity for the PAC-3 Missile Segment Enhancement (“MSE”), the world’s most advanced air defense missile. LMT is currently producing more than 300 PAC-3 MSEs each year and expects to increase the figure to 500.
Moreover, the company boasts more than 65 years of experience partnering with the U.S. Air Force on Intercontinental Ballistic Missiles (“ICBM”) and the Reentry Vehicles they launch. This includes delivering more than 700 missiles and 3,000 re-entry vehicles to the Air Force and providing next-generation support equipment to enable LMT’s customers to test and maintain ICBMs with modern technology.
These statistics indicate the solid demand that Lockheed Martin’s missiles and associated parts, such as missile fuses and warheads, enjoy in the global missile market. The latest contract win is a bright example of that.
LMT’s Growth Prospects
Rapidly increasing geopolitical tensions worldwide and heightened regional conflicts in different parts of the globe, like the Middle East, Eastern Europe and the South China Sea over the last decade, have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily these days in advanced missile systems for deterrence and defense. This, in turn, has been boosting the demand for technologically advanced missile systems.
This must have prompted the Mordor Intelligence firm to project that the global missiles and missile defense system market will witness a CAGR of 5% over the 2024-2029 period. Such growth opportunities offered by the aforementioned market should bode well for Lockheed, with its product portfolio consisting of numerous combat-proven missiles that are being bought by multiple nations worldwide.
Notably, its Missiles and Fire Control (“MFC”) business segment provides air and missile defense systems as well as tactical missiles and air-to-ground precision strike weapon systems like the Terminal High Altitude Area Defense (THAAD) air and missile defense program, Precision Strike Missile (PrSM) and Multiple Launch Rocket System (MLRS). This unit registered a solid sales improvement of 8% year over year to $3.18 billion in the third quarter of 2024, buoyed by the production ramp-up of Guided Multiple Launch Rocket Systems and LRASM programs.
Looking ahead, solid order flows like the latest one should enable LMT’s MFC unit to register a similar solid sales improvement trend in the coming years, backed by the strong growth trend offered by the global missile and missile defense system market, as mentioned above.
Opportunities for Peers
LMT apart, defense contractors that are likely to benefit from the growth opportunities offered by the missiles and missile defense system market are as follows:
Northrop Grumman (NOC - Free Report) : It creates and manufactures warheads, fuses, sophisticated high-speed propulsion systems and other missile components. The company is one of the top suppliers of solid rocket propulsion for air-launched missiles, interceptors, submarine-launched weapons and hypersonic missile systems.
Northrop has a long-term (three to five years) earnings growth rate of 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales implies growth of 5.3% from the prior-year reported figure.
RTX Corp (RTX - Free Report) : It offers a variety of combat-proven missile defense systems, including the Patriot missile, Standard Missiles, Advanced Medium-Range Air-to-Air Missiles, Evolved Seasparrow Missiles, the Tomahawk cruise missile and a few more. To keep up with its growing demand for a wide variety of missiles, RTX broke ground with a $115 million worth, 26,000-square-foot expansion of its Redstone Raytheon Missile Integration Facility in April 2024.
RTX boasts a long-term earnings growth rate of 10.2%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 7.2% from the 2023 reported figure.
The Boeing Company (BA - Free Report) : For almost 25 years, Boeing has been providing the United States, its allies and international partners with air and missile defense systems. The Avenger Air Defense System, Ground-Based Midcourse Defense and a few additional missiles are among its product offerings.
BA boasts a long-term earnings growth rate of 19.3%.
Price Movement
In the past year, shares of Lockheed have surged 20.5% against the industry’s decline of 1.7%.
Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.