Yahoo Finance Lockheed Martin (LMT) Arm Wins $29.7M Deal for Navy Submarines
Lockheed Martin Corporation’s LMT business unit, Rotary and Mission Systems, recently clinched a modification contract involving Navy submarines. The Naval Sea Systems Command, Washington, DC. awarded the deal.
Details of the Deal
Valued at $29.7 million, the contract includes systems engineering and integration on Navy submarines. The work related to this deal will be carried out at multiple locations across the United States, with the majority in Manassas, VA. The work is scheduled to be completed by December 2023.
What’s Favoring Lockheed Martin?
Nations are increasing defense spending to strengthen their defense structure. In such a scenario, military submarines, which are an integral part of warfare missions, may witness an increase in demand as these assists the Navy in carrying out underwater missions effectively.
Per the report from Mordor Intelligence, the submarine market is expected to witness a CAGR of more than 4% during the 2022-2031 period. In such an increased demand scenario, Lockheed Martin may witness a steady demand inflow in the long haul.
Lockheed Martin boasts 40 years of full lifecycle submarine platform support in eight countries. Further, LMT has in-depth experience and knowledge in submarine combat system design, test, integration, certification and sustainment.
The company designs, develops and integrates submarine combat systems for the United States, the U.K., Canada, Brazil and Spain. This entails an already strong global position in the submarine combat system.
Moreover, Lockheed Martin is the U.S. Navy’s submarine combat system integrator, spanning 72 submarines of multiple classes. Its product range offers new construction submarines and combat system modernization across the entire fleet.
Such abilities in the submarine arena may enable LMT to win multiple orders, like the latest one. This is likely to bolster its revenue generation prospects from the submarine arena.
Peer Growth
Prominent defense majors that have been manufacturing submarines and related parts for the defense industry and are likely to enjoy the perks of the increased demand are as follows:
BAE Systems’ BAESY Astute class submarines are the U.K.’s largest and most powerful attack submarines. These can strike targets up to 621 miles from the coast with pinpoint accuracy.
BAE Systems has a long-term (three to five years) earnings growth rate of 13.2%. BAESY’s investors have gained 35.9% in the past year.
General Dynamics GD is a renowned submarine manufacturer. Its Virginia-class submarine is a stealth submarine suitable for any marine warfare. The submarine excels in littoral and open-ocean environments and collects intelligence critical to the full spectrum of warfare.
General Dynamics’ long-term earnings growth rate is pegged at 9.5%. Shares of GD have returned 20.4% value to its investors in the past year.
Northrop Grumman NOC designs, develops and produces communication systems, sensors, signal processing and electronic warfare systems to counter increasingly sophisticated sea-based threats. Northrop Grumman provides launch systems for submarines, and its eject launch technology has powered more than 7,000 successful launches.
NOC has a long-term earnings growth rate of 2.9%. Shares of Northrop Grumman have risen 49.9% in the past year.
Price Movement
In the past year, shares of Lockheed Martin have rallied 46% against the industry’s decline of 0.6%.
Image Source: Zacks Investment Research
Zacks Rank
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.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
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