Lockheed Martin Corporation LMT recently clinched a contract involving submarines. The award has been offered by the Naval Sea Systems Command, Washington, D.C.

Details of LMT's Deal

Valued at $23.5 million, the contract is expected to be completed by February 2026. Per the terms of the deal, Lockheed Martin can exercise options to provide engineering support for submarine electronic warfare systems on newly constructed and in-service submarines.

The work related to this deal will be executed in Syracuse, NY.

LMT Stock's Growth Prospects

Rising military conflicts, terrorism and border disputes have driven nations to focus more on national security and investments in enhancing their submarine fleet. This surge is fueled by the increasing demand for advanced technologies like stealth capabilities, underwater surveillance, advanced electronic warfare systems and long-range strike systems, as well as the growing complexity of modern naval warfare.

This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 7.6% for the global submarine market during the 2025-2030 time period.

This is likely to benefit Lockheed Martin, a major provider of submarine combat systems for the United States and other countries. The company serves as the U.S. Navy's submarine combat system integrator, covering 72 submarines across multiple classes, working on new builds and upgrades. With more than 40 years of experience, Lockheed Martin continues to win contracts for advanced submarine systems. The latest contract win is a prime example.

Opportunities for Other Defense Players

Other defense companies that are likely to enjoy the perks of the expanding global submarine market have been discussed below:

Huntington Ingalls Industries HII: Through its Newport News Shipbuilding division, HII is involved in producing the Columbia-class and Virginia-class submarines, two key assets of the U.S. Navy. The company provides fleet services to its submarines around the world, offering modernization, repair and installation services.

Huntington has a long-term (three to five years) earnings growth rate of 7.4%. The Zacks Consensus Estimate for HII's 2025 sales indicates year-over-year growth of 3.8%.

BAE Systems BAESY: It plays a vital role in the production of advanced submarines, particularly for the United Kingdom's defense sector. BAE Systems is the primary manufacturer of the Astute-class nuclear submarines, which are integral to the Royal Navy's fleet.

BAE Systems has a long-term earnings growth rate of 11.1%. The Zacks Consensus Estimate for BAESY's 2025 sales indicates year-over-year growth of 55.7%.

Northrop Grumman Corporation NOC: It is a renowned provider of missile launch systems for naval submarines. The company manufactures Launcher Subsystem hardware to support the Columbia and Dreadnought common missile compartment program.

Northrop has a long-term earnings growth rate of 19%. The Zacks Consensus Estimate for NOC's 2025 sales indicates year-over-year growth of 3.3%.

LMT Stock's Price Movement

Shares of Lockheed Martin have gained 7.4% in the past year against the industry's 2.7% 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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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

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