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Lockheed Martin Corp.’s LMT business unit, Rotary and Mission Systems (RMS), recently secured a $191.2-million contract for providing Shipboard Systems Integration (SSI) involving Trident missiles to the U.S. Navy and the United Kingdom, for their respective fleet of ballistic missile programs. The contract was awarded by the Strategic Systems Programs, Washington, D.C.
Per the agreement, Lockheed Martin’s RMS unit will provide the required inertial navigation systems and associated inertial spares for the Ohio and Columbia ballistic missile submarine shallow-water submersible platforms. Majority of the work related to the deal will be performed in Heath, OH. The contract is expected to get completed by Feb 28, 2028.
Importance of the Trident II Missile System
The Trident II D5 is the latest generation of the U.S. Navy's submarine-launched fleet ballistic missiles, following the highly successful Polaris, Poseidon and Trident I C4 programs. It is currently aboard OHIO-class and British VANGUARD-class submarines. The Trident is equipped with multiple independently targetable reentry vehicles, armed with thermonuclear warheads and launched from nuclear-powered ballistic missile submarines.
A Trident II D5 missile is capable of reaching more than 4,000 miles at hypersonic speeds and then delivering multiple warheads with high accuracy against widely separated targets. Moreover, these missiles comprising the sea-based deterrent can’t be tracked or targeted when they are operating, making it one of the most lethal and critical weapon systems in the U.S. Navy's arsenal.
What Favors Lockheed Martin’s Growth Prospects?
Cross-border conflicts between nations along with spurring intra-state disputes have resulted in civil wars like the one going on in the Middle East. Therefore, the boom in the missile defense market is expected to continue over the next few years. Anticipating the continuation of this trend, the missile and missile defense systems market is estimated to see a CAGR of more than 10% during the 2020-2025 period, as predicted by Mordor Intelligence.
This should usher in frequent contract wins for Lockheed Martin, which is the nation’s largest defense contractor. Notably, the company’s portfolio includes a wide range of air, sea and land-based missile systems like Patriot Advanced Capability-3 (PAC-3), Terminal High Altitude Area Defense (THAAD), Trident II D5 Fleet Ballistic Missile (FBM) and many more.
Other Missile Makers Poised to Benefit
Other prominent missile makers in the nation, such as Northrop Grumman NOC, General Dynamics GD and Raytheon Technologies RTX, are also poised to benefit from such projections.
Notably, Northrop Grumman’s missile defense program includes the AGM-88E advanced anti-radiation guided missiles (AARGM), Ground Based Strategic Deterrent (GBSD) weapon system and rocket propulsion systems.
General Dynamics’ Ordnance and Tactical Systems are the system integrators of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.
Similarly, Raytheon Technologies' missile defense capabilities include Patriot GEM-T missiles; SM-6 missile destroys cruise missiles and ballistic missiles, NASAMS, among others.
Price Movement and Zacks Rank
Shares of Lockheed Martin, a Zacks Rank #3 (Hold) company, have gained 7% in the past three months compared with the industry’s growth of 3.7%. 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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