Yahoo Finance Lockheed Wins a Deal to Support U.S. Presidential Helicopter Program
Lockheed Martin Corp.’s LMT business unit, Sikorsky Aircraft, recently secured a modification contract, worth $23.1 million, involving the VH-92A Patriot in-service helicopter. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Per the terms of the deal, Lockheed will procure sustainment spares and provide repair support of aircraft components for the VH-92A helicopter. A major portion of the work related to this contract will be executed in Stratford, CT, and Woodlawn, WA.
LMT Stock’s Supremacy in the Combat Helicopter Market
Lockheed is a well-known manufacturer of combat helicopters, not only in the United States but also around the world. Its Sikorsky business unit has been providing advanced flight solutions ever since 1923. When it comes to the military section of this unit, Sikorsky offers a handful of combat helicopters like the Black Hawk, CH-148 Cyclone, CH-53K, HH-60W, MH-60R Seahawk, S-97 and a few more to the U.S. Army, Navy as well as armed forces of several other nations across the globe.
The ability of these helicopters to operate in complex, networked battlefields on the virtue of their increased agility, improved situational awareness through advanced sensors, high speeds, state-of-the-art armors, as well as versatility to operate in different weather conditions and altitude have made them the preferred choice for many nations’ armies. This can be gauged from the solid order flows that the Sikorsky unit enjoys each quarter, with the latest contract being a bright example of that.
As far as VH-92A is concerned, it is the presidential helicopter in the United States that ensures long-term affordability by utilizing the FAA-certified Sikorsky S-92 aircraft, which is the best-in-class for safety and reliability. The fact that LMT’s aircraft have flown every U.S. president since 1957 surely reflects the company’s supremacy in the U.S. combat helicopter space.
What Lies Ahead for LMT Stock?
As countries worldwide enhance their defense capabilities, spending on advanced military arms and ammunition is rapidly increasing. This includes growing investments in military helicopters, which are crucial for air warfare missions. This might have prompted the Mordor Intelligence firm to forecast a compound annual growth rate (CAGR) of more than 2.9% for the global military helicopter market from 2024 to 2030.
Such solid market prospects offer growth opportunities for Lockheed, with its Sikorsky building some of the most agile combat helicopters in the world. The company constantly tries to innovate new military helicopters to maintain its supremacy in the global military helicopter market.
Evidently, together with Boeing BA, Lockheed is currently developing the SB-1 Defiant helicopter for the U.S. Army's joint multi-role technology demonstration program. The helicopter can fly twice as far and fast as the Black Hawk.
Opportunities for LMT’s Peers
Other defense companies that are expected to enjoy the perks of the expanding military helicopter market have been discussed below.
Boeing: Its military rotorcraft serves the U.S. Army, Navy, Marines and Air Force and allied defense forces in more than 20 countries across the globe. Boeing’s Defense, Space & Security segment produces rotorcraft and rotary-wing programs, such as H-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.
The company has a long-term (three to five years) earnings growth rate of 21.3%. The Zacks Consensus Estimate for BA’s third-quarter 2024 sales indicates an improvement of 10.8% from the prior-year quarter’s reported figure.
Airbus Group EADSY: It is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
The company’s long-term earnings growth rate is 11.4%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 5.4% from the 2023 reported figure.
Textron TXT: Its business unit, Textron Aviation Defense, designs, builds and supports versatile and globally known military helicopters, preferred for training and attack missions. Some of Textron’s renowned products are the Beechcraft T-6C trainer and the AT-6 Wolverine.
TXT boasts a long-term earnings growth rate of 10.1%. The consensus estimate for TXT’s 2024 sales indicates an improvement of 5.6% from the 2023 reported figure.
Price Movement
In the past year, shares of Lockheed have risen 33.3% compared with the industry’s growth of 5.4%.
Image Source: Zacks Investment Research
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.
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