Teledyne Technologies, Inc.’s TDY business unit, Teledyne FLIR Defense, has recently launched its Cerberus XL C-UAS Mobile Counter-Drone System at the Association of the U.S. Army (“AUSA”) conference in Washington, D.C. This launch should expand TDY’s footprint in the booming unmanned aerial vehicle (“UAV”) market space.

A Brief Note on TDY’s Cerberus XL C-UAS
 

Cerberus XL C-UAS is a durable, cutting-edge integrated system outfitted with high-performance and long-range Counter Unmanned Aerial Systems (C-UAS) sensors that can be deployed quickly in harsh settings. It delivers unmanned perimeter and border UAS situational awareness as well as multi-mission security.

It can be configured for air, ground and maritime threats, and addresses the entire counter-drone kill chain, including detecting, tracking, identifying and defeating.

What’s Favoring TDY Stock?
 

Increasing geopolitical tensions worldwide lately, like the Russian invasion of Ukraine as well as the ongoing conflict in the Middle East, have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, UAV has steadily become pivotal in a nation’s defense strategy. UAV demand has also been gaining momentum of late due to its low-cost feature coupled with the zero-mortality rate and its excellent surveillance abilities.

Per a report by the Mordor Intelligence firm, the military UAV market is projected to witness a CAGR of 11.7% during 2024-2029. Such a solid growth opportunity offered by the military UAV market should bode well for Teledyne.

In particular, Teledyne develops a wide variety of unmanned aerial vehicles, such as Black Recon, Black Hornet 3 and Black Hornet 4, which play a critical role in providing situational awareness and empowering soldiers with critical insights for mission success. In its integrated solutions business portfolio, the company also possesses Cerberus XL, apart from the Cerberus XL C-UAS Mobile Counter-Drone System. Notably, Cerberus XL is a rugged, trailer-based integrated long-range mobile surveillance air domain awareness system that can provide unmanned remote perimeter as well as border situational awareness and security.

Opportunities for Other Aerospace Companies
 

Considering the solid growth opportunities offered by the global UAV market, other defense primes like RTX Corporation. RTX, BAE Systems BAESY and Kratos Defense & Security Solutions, Inc. KTOS should also benefit.

RTX Corporation 's Coyote UAS is outfitted with a sophisticated seeker and warhead capable of identifying and eliminating hostile UAVs. It is suitable for improved surveillance imagery, greater targeting capabilities, near-real-time damage assessment and a lower hazard to human aircraft.

The RTX stock boasts a long-term (three to five years) earnings growth rate of 10.3%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 6.8% from the previous year’s figure.

BAE Systems has been involved in the development of a family of uncrewed platforms to address a wide range of capability requirements. Its T-Series product range of all-electric uncrewed aerial systems offers an affordable alternative for heavy lift requirements to use with civilian and military customers. Its PHASA-35 is an ultra-lightweight, solar-electric High Altitude Pseudo-Satellite UAS, which provides an alternative and flexible approach to conventional systems such as satellites or conventionally powered aircraft, for the provision of persistent and cost-effective imagery and communications.

The stock boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for BAESY’s 2024 sales implies an improvement of 37.4% from the previous year’s level.

Kratos is the primary unmanned aerial target drone system provider for the U.S. Air Force, Navy, Army and numerous allied foreign defense agencies. Its UAS product range includes XQ-58A Valkyrie, UTAP-22 and X-61A Gremlin etc.

Kratos delivered an average earnings surprise of 73.75% in the last four quarters. The Zacks Consensus Estimate for KTOS’ 2024 sales implies an improvement of 10.8% from the previous year’s level.

TDY’s Stock Price Movement
 

In the past month, shares of Teledyne have risen 4% compared with the industry’s growth of 0.9%.

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TDY’s Zacks Rank
 

Teledyne currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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