Lockheed Martin Corporation’s LMT unit, Rotary and Mission Systems, recently clinched a modification contract to support the MH-60S aircraft program. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.

Details of LMT’s Deal

Valued at $19 million, the contract is expected to be completed by March 2028. Per the terms of the deal, Lockheed will provide two initial structural modification kits for the MH-60S aircraft, non-recurring engineering support and components that are not expected to meet the current service life.

The work related to this deal will be executed in Stratford, CT, and Owego, NY.

What’s Favoring LMT Stock?

Rising military conflicts, terrorism and border disputes, along with rapid technological advancements in combat aircraft, have led nations across the globe to increase their defense spending on combat-proven jets, which constitute an integral part of their defense structure.

This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 5.2% for the global military aviation market during the 2024-2030 period.

Such strong market prospects drive growth opportunities for Lockheed, backed by its robust portfolio of combat jets, including the F-16, F-22 and F-21 aircraft, in addition to the MH-60S. Lockheed’s total backlog was $165.69 billion as of Sept. 29, 2024.

Opportunities for Other Defense Stocks

Other defense companies that are likely to benefit from the expanding global fighter aircraft market are discussed below:

Northrop Grumman Corporation NOC: Northrop provides manned and unmanned combat air systems. It builds some of the world’s most advanced aircraft like the E-2C Hawkeye 2000, A-10 Thunderbolt II, F-5 Tiger Fighter Jet and many more.

Northrop has a long-term (three to five years) earnings growth rate of 19%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates growth of 3.4% from the 2024 estimated figure.

Embraer ERJ: The company offers a comprehensive portfolio of the most advanced aircraft in the combat market, which includes the A-29 Super Tucano light attack and advanced trainer and the C-390 Millennium military multi-mission aircraft.

The Zacks Consensus Estimate for ERJ’s 2025 sales indicates growth of 18.3% from the 2024 estimated number. The company delivered an average earnings surprise of 127.28% in the last four quarters.

The Boeing Company BA: Its Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft. BA’s product portfolio includes a range of combat-proven aircraft like the F/A-18 Super Hornet, P-8, C-17 Globemaster III, EA-18G and a few more.

Boeing has a long-term earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales implies an improvement of 22.1% from 2024’s projected figure.

LMT Stock’s Price Movement

Shares of LMT have risen 2.9% in the past six months against the industry’s 1.7% decline.

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LMT’s Zacks Rank

LMT 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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