The Boeing Company BA recently clinched a modification contract for providing sustainment services to C-17 Globemaster III transport aircraft. The award has been provided by the Air Force Lifecycle Management Center, Robins Air Force Base, GA.

Details of the Deal

Valued at $1.68 billion, the contract is projected to be completed by Oct. 31, 2027. Work related to this deal will be carried out in various locations across the United States and worldwide. 

This contract includes Foreign Military Sales to Australia, Canada, India, Kuwait, NATO Airlift Management Program, Qatar, United Arab Emirates and the United Kingdom.

What’s Favoring the BA Stock?

Increasing defense budgets worldwide and increasing military troop deployment, driven by rising geopolitical tensions as well as rising use of military transport aircraft in humanitarian missions and disaster relief operations, have been fueling the demand for transport jets like C-17 Globemaster III. The rising complexity of global military operations, combined with the need for interoperability among allied forces, has further increased the demand for advanced military transport aircraft, which can be integrated seamlessly into joint operations.

With Boeing being a prominent manufacturer of renowned, combat-proven aircraft across the globe, jets from its product portfolio enjoy a solid demand when it comes to the transportation of military troops or other first responders in other operations. The latest contract win bears a bright example of that.

Notably, BA’s C-17 Globemaster III boasts the ability to carry large equipment, supplies and troops directly to small airfields in harsh terrain anywhere in the world. It serves as the primary strategic lift aircraft for the U.S Air Force for global transport of troops and equipment.

The solid demand that this particular jet of Boeing enjoys across the globe can be gauged from the fact that 275 C-17 aircraft are currently being operated worldwide.

Growth Opportunities for BA Stock

Increasing warfare situations across the globe, resulting in growing troop deployment, increased the usage of military transport aviation for airlifting troops, medical evacuation, firefighting and rescue missions in harsh environments. These have also escalated the use of aircraft to transport refugees and immigrants as a result of regional military conflicts have been boosting the need for high-capacity transport jets. 

This must have prompted the Morder Intelligence firm to project that the global military transport aircraft market will witness a CAGR of more than 7.1% during 2024-2029. 

Such growth opportunities offered by the military transport aircraft market should benefit America’s largest jet maker, Boeing. Notably, apart from C-17, the company’s product portfolio includes the CH-47 Chinook helicopter, which is an advanced, multi-mission, tandem rotor helicopter, proven in cargo and troop transport, search and rescue, casualty evacuation, special operations, humanitarian and disaster relief. With more than 950 Chinooks in 20 countries, the program continues to deliver unrivaled production, maintenance and sustainment cost efficiencies.

BA Stock’s Peer Prospects

Other aerospace companies that have strong presence in the military transport aircraft market and are thus expected to benefit from this market’s abovementioned growth opportunities have been discussed below:

Lockheed Martin Corp. LMT: Its C-5 Galaxy is the U.S. Air Force’s largest and only strategic airlifter. It can carry more cargo to greater distances than any other aircraft. With a payload of six Mine Resistant Ambush Protected vehicles or up to five helicopters, the C-5 can haul twice as much cargo as any other airlifter.

The company has a long-term earnings growth rate of 4.7%.  The Zacks Consensus Estimate for LMT’s 2024 sales indicates year-over-year growth of 5.3%.

Embraer S.A. ERJ: Its C-390 Millenium is a new-generation military multi-mission transport aircraft with unrivaled mobility and operational flexibility in a single platform. This aircraft provides air forces with optimal fleet performance generated by a cost-effective combination of high availability and productivity.

The company boasts a trailing four-quarter average earnings surprise of 52.28%.  The Zacks Consensus Estimate for ERJ’s 2024 sales indicates year-over-year growth of 19.1%.

Airbus Group EADSY: Its C295 is a robust, reliable and highly versatile tactical transport that is tailored for missions that range from carrying troops and cargo, maritime patrol, airborne warning, surveillance and reconnaissance to signals intelligence, armed close air support, medical evacuation, VIP transport and airborne firefighting. It is capable of carrying up to 9 tons of payload or as many as 71 troops at a maximum cruise speed of 260 kts. Currently, more than 200 C295 jets are in operation globally. 

The company has a long-term earnings growth rate of 11.4%.  The Zacks Consensus Estimate for EADSY’s 2024 sales indicates year-over-year growth of 5.4%.

BA Stock’s Price Movement

In the past year, shares of Boeing have lost 19.1% against the industry’s growth of 14.4%.

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Zacks Rank

Boeing 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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