Yahoo Finance Lockheed Martin Secures a $3.2 Billion Contract for JASSM & LRASM
Lockheed Martin Corporation LMT recently secured a contract valued at $3.23 billion for the procurement of Joint Air-to-Surface Standoff Missiles ("JASSM") and Long-Range Anti-Ship Missiles ("LRASM"). The work related to this deal will be carried out in Orlando, FL, and is projected to be completed by July 31, 2032.
The award has been provided by the U.S. Air Force Life Cycle Management Center, Eglin Air Force Base, FL. The contract will serve the governments of Japan, the Netherlands, Finland and Poland.
What’s Favoring LMT?
With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes growing investments in missiles and missile defense systems, which are crucial for warfare missions. Lockheed Martin, as a prominent manufacturer of missiles and missile defense systems, thus continues to witness a steady flow of orders from the Pentagon and U.S. allies. The latest contract win is an example of that.
Notably, Lockheed Martin’s first cruise missile, JASSM, provides continued significant long-range, precision engagement capabilities for air-to-ground missions. The combat-proven and mission-effective weapon system is designed to destroy high-value, well-defended, fixed and relocatable targets from significant standoff range, keeping aircrews well out of danger from hostile air defense systems without compromising lethality or reach.
On the other hand, LRASM is a precision-guided intelligent anti-ship missile designed to prevent a variety of surface threats at very long ranges. It can navigate semi-autonomously to a target and deliver a precise payload from a safe standoff range.
Such notable features of the aforementioned missiles of Lockheed Martin are likely to have been boosting their demand, which is further evident from the latest contract win.
LMT’s Growth Prospects
Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems, backed by the rapid development of advanced missile technologies over the last decade.
This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the missiles and missile defense systems market during the 2024-2029 time period.
This should benefit Lockheed Martin, with its Missile and Fire Control unit being a recognized developer of high-performance missiles. The unit pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense air and missile defense programs as well. Its prominent missiles include Precision Strike Missile, Joint Air-to-Ground Missiles and Hellfire II Missiles.
Prospects of LMT’s Peers
Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below.
Northrop Grumman Corporation NOC: Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.
The company’s long-term (three to five years) earnings growth rate is 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates year-over-year growth of 5.4%.
RTX Corporation RTX: It is known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.
The company’s long-term earnings growth rate is 10.4%. The Zacks Consensus Estimate for RTX’s 2024 sales indicates year-over-year growth of 7%.
The Boeing Company BA: It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.
The company has a long-term earnings growth rate of 21.3%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 20%.
LMT Stock’s Price Movement
Shares of LMT have gained 26.2% in the past three months compared with the industry’s 10.9% growth.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
LMT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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