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Defense Stock Roundup: Boeing, Huntington Ingalls, Lockheed Martin Score Big Wins


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A generous flow of multi-billion-dollar funds from the Pentagon has kept defense stocks buoyant over the trailing five trading sessions. As a result, major indices of the aerospace and defense industry ended in the green. Notably, the S&P 500 Aerospace & Defense (Industry) and the Dow Jones U.S. Aerospace & Defense indices rose 3% in the aforementioned period.

Among the last week's highlights, defense majors namely The Boeing Company BA , Huntington Ingalls Industries, Inc. HII , General Dynamics Corp. GD , Lockheed Martin Corp. LMT and Raytheon Company RTN secured number of notable contracts from the Department of Defense's daily funding session.

Recap of Past Week's Important Stories

1. Boeing secured a contract, with an estimated value of $9.2 billion, for delivering Advanced Pilot Training aircraft and ground-based training systems. The deal includes an initial order of $813.4 million. Per the terms of the deal, Boeing will deliver of 351 aircraft and 46 associated training devices along with other ancillary supplies and services.

Under this agreement, the company can supply up to 475 aircraft and 120 training systems for the U.S. Air Force (read more: Boeing Wins $9.2B Deal for Advanced Pilot Training Program ).

2. Huntington Ingalls won a multi-year contract worth $5.1 billion for manufacturing six DDG 51 class ships. Work related to the deal is scheduled to be over by April 2029. The deal includes options for engineering change proposals, design budgeting requirements, and post-delivery availabilities on the awarded ships, which if exercised, would bring the cumulative value of this contract to $5.3 billion.

Majority of the work will be executed in Pascagoula, MS (read more: Huntington Ingalls Wins $5.1B Deal to Build 6 DDG 51 Ships ).

3. General Dynamics ' business unit, Bath Iron Works (BIW), clinched a $3.9 billion multi-year contract for manufacturing four DDG 51 class ships. Work related to the deal is scheduled to be completed by June 2028. Per the terms of the deal, Bath Iron may also provide engineering change proposals, design budgeting requirements and post-delivery availabilities.

The deal also boasts provisions for producing additional DDG 51 class ships. Majority of the work will be executed in Bath, ME (read more: General Dynamics Wins $4B Navy Deal to Build 4 DDG 51 Ships ).

4. Lockheed Martin won a $1.36-billion contract for the production of GPS IIIF 11th and 12th Space Vehicles. The deal entails Lockheed Martin to provide non-recurring engineering services along with space vehicle test bed and simulators.

Additionally, the contract includes options for the production of up to 22 GPS III Space Vehicles, Space Vehicle storage, and launch and on-orbit support. Work related to the deal is expected to get completed by Aug 31, 2027 (read more: Lockheed Martin Secures $1.4B GPS IIIF Space Vehicles Deal ).

The company secured another contract worth $631.8 million to deliver a variety of Hellfire II missile variants to the Netherlands and Japan, under the Foreign Military Sales program. Work related to the deal is expected to get completed by Sep 30, 2021 (read more: Lockheed Clinches $632M FMS Deal for Hellfire II Missile ).

Lockheed Martin also clinched a modification contract worth $316 million for procuring support equipment in relation to the low-rate initial production of F-35 jets' 11th lot. Work related to the deal is scheduled to be over by September 2023.

The contract will cater to the U.S. Air Force, Marine Corps, Navy and non-Department of Defense (DoD) participants (read more: Lockheed Martin Secures $316M Deal to Support F-35 Program ).

5. Raytheon won a $482 million contract to deliver upgrades and conversions, system overhauls as well as associated hardware related to MK 15 Close-In Weapon System (CIWS). Work related to the deal is scheduled to be completed by April 2024.

Notably, CIWS is a fast-reaction, rapid-fire 20-millimeter gun system, which provides Navy ships with an inner layer point defense capability against anti-ship missiles (ASM), aircrafts and littoral warfare threats that can infiltrate other fleet defenses (read more: Raytheon Secures $482M Deal for MK 15 Close-In Weapon System ).

Performance

Over the past five trading sessions, defense biggies put up a solid show. Boeing gained the most with its share price rising 6.8%, followed by General Dynamics.

The industry's performance over the last six months has been mixed. Boeing gained the most this time as well, with its share price rising more than 19%, while General Dynamics and Rockwell Collins lost.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

Company Last Week Last 6 Months
LMT 1.33% 3.80%
BA 6.82% 19.81%
GD 1.82% -0.07%
RTN 0.47% 2.13%
NOC 0.25% 0.78%
COL 1.18% -0.40%
TXT 0.27% 2.68%
LLL 0.06% 1.24%

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: LMT , HII , BA , GD , RTN



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