Lockheed Martin Corporation’s LMT business unit, Sikorsky, recently secured a modification contract to provide full funding for UH-60M and HH-60M Black Hawk helicopters. The award has been provided by the Army Contracting Command, Redstone Arsenal, AL.

Valued at $375.9 million, the contract is expected to be completed by Dec. 31, 2027. The work related to this contract will be carried out in Stratford, CT.

What’s Favoring LMT Stock?

With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes growing investments in military helicopters, which are crucial for air warfare missions. Lockheed Martin, being a prominent manufacturer of combat helicopters, has thus been witnessing a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is an example of that.
 
The United States and other 36 nations’ reliance on Lockheed Martin's Black Hawk multirole helicopters underscores its prominence in the combat helicopter space. This can be further gauged from the fact that more than 5,000 Black Hawk helicopters of various types are in service worldwide at present.

Notably, LMT’s UH-60M helicopter is a combat-proven helicopter for the U.S. Army and allied militaries around the globe. It is equipped with powerful twin engines and reconfigurable cabin with 9,000 lbs of cargo capacity. It can transport troops, deliver supplies and fly search and rescue, even in contested environments, making it reliable for the toughest mission challenges.

Growth Prospects for LMT Stock

Rising military conflicts, terrorism and border disputes, along with rapid technological advancements in military helicopters, have led nations to increase their defense spending, with combat-proven helicopters constituting an integral part of a nation’s defense structure.

This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of more than 2.9% for the military helicopter market during the 2024-2030 time period.

Such solid market prospects offer growth opportunities for Lockheed Martin. Notably, its portfolio includes well-established helicopters like the CH-53K King Stallion, MH-60R Seahawk and CH-148 Cyclone, in addition to the Black Hawk.

Opportunities for LMT’s Peers

Other defense companies that are expected to enjoy the perks of the expanding military helicopter market have been discussed below.

The Boeing Company BA: Its military rotorcraft serves the U.S. Army, Navy, Marines, Air Force and allied defense forces in more than 20 countries across the globe. Boeing’s Defense, Space & Security segment produces rotorcraft and rotary-wing programs, such as H-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.

The company has a long-term (three to five years) earnings growth rate of 19.3%.  The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 23.5%.

Northrop Grumman Corporation NOC: Its Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management to tactical users without relying on manned aircraft or space-based assets. NOC also provides avionics systems, mission equipment and support for military helicopters, including upgrades and modifications.

The company’s long-term earnings growth rate is 19.1%. The consensus estimate for NOC’s 2024 sales indicates year-over-year growth of 5.3%.

Textron Inc. TXT: Its Bell business segment supplies advanced military helicopters to the U.S. government and military customers outside the United States. Its primary combat helicopters include H-1, Bell 412, Bell AH-1Z, Bell 407 and a few more rotorcraft.

TXT boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales indicates year-over-year growth of 1.1%.

LMT Stock’s Price Movement

Shares of LMT have gained 11.3% in the past six months against the industry’s 1.4% 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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