Lockheed Martin Corp.’s LMT business unit, Aeronautics recently won a modification contract involving its F-35 Lightning II program. Work related to this deal is expected to be completed by June 2021.
Valued at $16 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Per the terms of the deal, Lockheed will offer support to manage diminishing manufacturing sources for the F-35 Program.The entire task will be executed in Fort Worth, TX.
The contract will cater to the U.S. Air Force, Navy and non-Department of Defense (DOD) participants.
Rising security threat from terrorist activities and adverse geopolitical situations have resulted in increased need for enhancing United States’ defense budget, of which combat aircraft constitutes a major portion. Given F-35’s advanced stealth capabilities, combined with fighter aircraft speed and agility, the jet dominates the combat aircraft market.
Impressively, the F-35 program is supported by an international team of leading aerospace majors, which makes the program reliable and attractive. Notably, Northrop Grumman NOC rendered its expertise in carrier aircraft and low-observable stealth technology to this program, while Raytheon Technologies’ RTX Pratt & Whitney offered its world renowned jet engines. On the other hand, BAE Systems’ BAESY short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities.
Lockheed sees frequent contract wins for the F-35 jets, both from Pentagon and other U.S. allies. For instance, last October, Lockheed finalized a $34-billion agreement for the production and delivery of 478 F-35s, at the lowest aircraft price in the program’s history.
Over the long run, production of F-35 jets is expected to continue steadily, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Consequently, we expect Lockheed to witness more order inflows for F-35, which in turn should bolster this defense contractor’s top line.
Price Performance & Zacks Rank
Lockheed Martin’s stock has gained 10.8% in the past year against the industry’s decline of 22.4%.
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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