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Lockheed (LMT) Wins $657M Deal for UH-60M Aircraft

Lockheed Martin Corp’s LMT business unit, Sikorsky, recently won a modification contract for procuring UH-60M aircraft. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.

Valued at $656.7 million, the contract is expected to be completed by Jun 30, 2027. Work related to this deal will be carried out in Stratford, CT.

UH-60M Aircraft’s Specifics

The multi-mission UH-60M is the latest in the Black Hawk helicopter family and is more capable, survivable, maintainable, powerful and effective than its predecessors. The UH-60M has an additional payload and range, advanced digital avionics, better handling qualities and situational awareness, active vibration control, improved survivability, and offers improved performance using high-speed machined parts.

The aircraft is the primary medium-lift helicopter for the U.S. Army, performing a wide range of missions that encompass Air Assault, MEDEVAC, CSAR, Command and Control, and VIP transport. The centerpiece of the UH-60M Black hawk helicopter is an advanced digital avionics suite that provides improved situational awareness and interoperability with the Future Combat System.

What Favors Lockheed Martin?

In the recent times, U.S. military helicopters have gained prominence and significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments can be attributed to Lockheed Martin, paving the way for securing valuable helicopter-related contracts in the recent times. The latest contract win is a bright example of that.

With the fiscal 2023 defense budget offering investment potential worth $56.5 billion in aircraft, we expect Lockheed Martin’s Rotary and Mission Systems (RMS) business segment, which comprises the Sikorsky helicopters, to benefit.

Helicopter Market Prospects

The global attack helicopter market is estimated to witness a CAGR of more than 4% during the 2020-2025 period, per the latest forecast made by market research firm, Mordor Intelligence. This indicates solid opportunities for renowned combat helicopter manufacturers like Lockheed Martin, Textron TXT, Airbus EADSY and Boeing BA.

Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.

TXT stock boasts a long-term earnings growth rate of 15.2%. The Zacks Consensus Estimate for 2023 sales implies growth of 9.3% from the 2022 reported figure.

Airbus is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.

EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2023 sales implies growth of 13.9% from the 2022 estimated figure.

Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.

BA stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2023 sales implies growth of 22.7% from the 2022 reported figure.

Price Movement

In the past year, shares of Lockheed have gained 17.8% against the industry’s 5.2% decline.

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Zacks Investment Research

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Zacks Rank

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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