Yahoo Finance AJRD Inks $215.6M Contract to Boost Manufacturing Capacity
Aerojet Rocketdyne Holdings, Inc. AJRD recently inked a $215.6 million cooperative agreement with the U.S. Department of Defense. The funds have been granted to the company mainly to expand its manufacturing capacity of rocket propulsion systems used in military missiles.
Per the agreement, Aerojet will fortify its manufacturing capacity while also adding modern and technologically advanced equipment. Through the upgradation of the capacity, the company aims to meet the increased motor production demand, mainly for Javelin, Stinger and the Guided Multiple Launch Rocket System.
Aerojet Rocketdyne’s Growth Prospects
Modernized infrastructure will assist the company in meeting the demand for technologically advanced rocket propulsion products in the ever-changing dynamics of the defense landscape. Per the report from Markets and Markets, the rocket propulsion market is projected to witness a CAGR of 8.5% over the 2017-2023 period.
This exemplifies a probable order inflow of advanced rocket propulsion systems for Aerojet going forward. Moreover, the company is making meaningful efforts to provide innovative and technologically advanced products to its customers.
Aerojet recently added a new 51,000 sq. ft. facility at its Camden, AR, site that consolidates solid rocket motor manufacturing activities. The company also leased a massive 379,000 sq. ft. facility to expand manufacturing capabilities in Huntsville, AL, where it will produce inert components to support solid rocket motors for a range of defense programs.
Such capacity enhancement efforts by the company will enable it to provide its customers with improved product quality, cost efficiency and increased production. This may boost the revenue generation prospects of AJRD in the days ahead.
Peer Moves
Defense majors that are likely to benefit from the expanding market of the rocket propulsion system are as follows:
Northrop Grumman NOC provides reliable and flight-proven solid rocket motors for both Northrop Grumman vehicles and other providers in defense and commercial markets. For defense programs, Northrop produces propulsion systems for the company-built Ground-based Midcourse Defense interceptor and the Trident II D-5 and Minuteman III strategic missiles.
Northrop’s long-term earnings growth rate is 3.5%. Shares of NOC have returned 1.5% value to its investors in the past year.
In April 2022, Raytheon RTX announced a strategic investment in Firehawk Aerospace, which specializes in high-performance propulsion technology.
Raytheon boasts a long-term earnings growth rate of 8.3%. RTX stock has appreciated 16% in the past six months.
Price Performance
Shares of Aerojet Rocketdyne have soared 32.8% in the past year against the industry’s fall of 4.9%.
Image Source: Zacks Investment Research
Zacks Rank
Aerojet Rocketdyne carries a Zacks Rank #4 (Sell).
A better-ranked stock in the same industry is FTAI Aviation Ltd. FTAI, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate forFTAI Aviation’s 2023 earnings has been revised upward by 6.1% in the past 60 days. The consensus estimate for 2024 earnings has been revised upward by 89.7% in the past 60 days.
The Zacks Consensus Estimate for the company’s 2023 sales suggests an improvement of 21.8% from the prior-year reported figure. The consensus mark for FTAI’s 2024 sales implies an increase of 8.1% from the prior-year reported figure.
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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Aerojet Rocketdyne Holdings, Inc. (AJRD) : Free Stock Analysis Report
FTAI Aviation Ltd. (FTAI) : Free Stock Analysis Report
Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report
