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Boeing (BA) Wins $1.95B Contract for Apache AH-64E Production

The Boeing Company BA recently clinched a $1.95-billion modification contract for Apache AH-64E production. The deal has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. The work related to this deal will be carried out at Mesa, AZ, and is expected to be completed by Dec 31, 2027.

Importance of Apache Helicopters

The Apache family is the world’s most advanced and proven attack helicopter and represents the backbone of the U.S. Army’s attack helicopter fleet and a growing number of international defense forces.

Its strong demand can be gauged by the 1,200 aircraft in operation worldwide. Boeing’s global customers for the Apache include Egypt, Greece, India, Indonesia, Israel, Japan, Korea, Kuwait, the Netherlands, Qatar, Saudi Arabia, Singapore, the United Arab Emirates and the United Kingdom.

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The AH-64E, the latest version of the AH-64 gunship, is a lethal, survivable and agile system. It provides the range, maneuverability and performance needed by ground forces and contributes to the current and future joint mission success.

Such remarkable features must have led to the increased demand for this helicopter, resulting in a strong inflow of orders for Boeing for Apache AH-64E helicopters, like the latest one.

Growth Prospects

Apart from the United States, nations are also fortifying their defense budget to modernize and upgrade their defense structure to deter any warlike situation. Military helicopters being an integral part of the defense landscape have witnessed a significant increase in demand. The demand may increase in the days ahead as nations strengthen their arms and ammunition.

Per the report from Business Research Company, the global military helicopter market is projected to witness a CAGR of 7.3% over the 2023-2032 period. This is likely to benefit BA, which enjoys a solid position in the military helicopter market. This may result in an inflow of orders for the company, like the latest one, boosting its revenue generation prospects.

Other defense players that boast a strong portfolio of military helicopters and tend to capitalize on the growing demand are as follows:

Lockheed Martin’s LMT business unit, Sikorsky’s helicopter programs include Black Hawk, Seahawk, CH-53K King Stallion, the Combat Rescue Helicopter and the VH-92A helicopter.

Lockheed has a long-term earnings growth rate of 6.9%. Its investors have gained 5.9% in the past year.

Textron TXT enjoys a leading position in manufacturing military helicopters. Its product portfolio includes Bell 360, V-280, AH-1Z, UH-1Y, etc.

Textron’s long-term earnings growth rate is pegged at 11.2%. Shares of TXT have returned 7.5% value to its investors in the past six months.

Airbus EADSY offers a comprehensive range of military helicopters. Its helicopter portfolio comprises the H125M, H145M, AS565 MBe, H160M, H175M, etc.

Airbus boasts a long-term earnings growth rate of 12.4%. EADSY’s stock has appreciated 7.5% in the past year.

Price Movement

In the past year, shares of Boeing have increased 8.1% against the industry’s fall of 16.1%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank

Boeing 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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The Boeing Company (BA) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Textron Inc. (TXT) : Free Stock Analysis Report

Airbus Group (EADSY) : Free Stock Analysis Report

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