General Dynamics Corp.’s GD business unit, Gulfstream Aerospace, clinched a $991-contractor logistics support services contract for its C-20 and C-37 aircraft. This seven-year contract, provided by the U.S. Air Force Life Cycle Management Center, will offer services to the U.S. Army, Coast Guard, Navy, Marine Corps and Air Force.

Per the deal, General Dynamics will offer a range of global maintenance, component overhaul, repair and modification services for the aforementioned aircraft fleet. The work related to this contract will be executed in multiple locations across the United States and Germany.

GD’s MRO market Expertise

As nations are spending heftily these days to secure their borders, fighter jets are playing key roles in defending a country’s safety. This has been boosting the demand for fighter jets. As demand for new aircraft is rising, so is the need for maintenance, repair and overhaul (MRO) services.

Per a report by the Mordor Intelligence firm, the Military Aircraft MRO market is projected to reach $47.48 billion by 2029, seeing a CAGR of 2.8% between 2024 and 2029. Such growth opportunities offered by the aforementioned market should bode well for General Dynamics in the coming years.

The company's business units — Jet Aviation and Gulfstream Aerospace — are key players in the MRO services market, providing services for various aircraft types. They contribute to public and military aviation by ensuring that aircraft remain operational, safe and up to date with the newest standards and technologies. Such notable MRO services offered by the company must have been ushering in notable contracts like the latest one, which should boost GD’s revenue prospects.

Opportunities for Other Defense Stocks

Other defense contractors that are anticipated to benefit from the expanding Military Aircraft MRO market are as follows:

RTX Corporation RTX: The company’s Collins Aerospace unit is a well-known provider of aircraft MRO services. In October 2024, this unit signed a 10-year contract with Air Europa to provide comprehensive MRO services for the airline's fleet of 787 aircraft.

RTX has a long-term (three to five years) earnings growth rate of 10.2%. The Zacks Consensus Estimate for RTX’s 2024 sales suggests growth of 7.2% from the prior-year reported figure.

Lockheed Martin LMT: Its Sikorsky unit’s Overhaul and Repair organization offers a diversified range of system services, repairing and overhauling dynamic systems, blades, avionics and numerous other components, from aircraft tip to tail. In September 2024, LMT joined hands with Australia’s Asia Pacific Aerospace company to support the Black Hawk global supply chain for boosting this fleet’s advanced repair services.

Lockheed Martin has a long-term earnings growth rate of 4.6%. The Zacks Consensus Estimate for LMT’s 2024 sales implies growth of 5.4% from the prior-year reported figure.

AAR Corp. AIR: The company is the largest independent MRO provider in North America, serving a global customer base. In September 2024, AAR won a contract with an aggregate ceiling value of $1.2 billion to provide depot airframe maintenance and depot field team support for P-8A Poseidon jets.

AAR Corp delivered an average earnings surprise of 1.80% in the last four quarters. The Zacks Consensus Estimate for the company’s fiscal 2025 sales indicates growth of 16.4% from the fiscal 2024 estimates.

GD Stock Price Movement

In the past year, shares of General Dynamics have rallied 15% against the industry’s decline of 2.1%.

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GD’s Zacks Rank

General Dynamics 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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