Bell-Boeing Clinches Contract to Support V-22 Jet Program

Bell-Boeing, a joint venture (JV) between The Boeing Company BA and Bell Helicopter — a unit of Textron Inc. TXT — recently secured a contract involving the V-22 aircraft. The deal was awarded by Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $24.8 million, the contract is projected to be completed by March 2023. Per the terms of the deal, Bell-Boeing will offer continued flight test support for the V-22 aircraft.

The majority of the task associated with this contract will be executed in Patuxent River, MD.

Growing Jet Demand & V-22 Jets

A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being the largest exporter of defense equipment across the world, there is a steady flow of contracts for its combat-proven weaponry from both Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation’s armaments, there is a steady flow of contracts for these.

Bell-Boeing’s primary product, V-22 Osprey is a family of multi-mission, tiltrotor military aircraft with both vertical as well as short takeoff and landing capabilities. It is designed to combine the functionality of a conventional helicopter with the long-range, high-speed cruise performance of a turboprop aircraft. Notably, the CV-22 is a variant of the V-22 family of jets and helps conduct long-range infiltration, exfiltration and resupply missions for special operations forces.

Considering these features of the aforementioned family of tiltrotors and the growing demand for military aircraft, V-22 and its variants enjoy decent demand across the globe. The latest deal win is a bright example of that.

Jet Manufacturers’ Prospects

Per a forecast made by Mordor Intelligence, the global military aircraft market is likely to register a CAGR of more than 4% during the 2022-2031 period. This surely is going to benefit major U.S. combat aircraft manufacturers like Bell-Boeing, Lockheed LMT and Northrop Grumman NOC, with North America dominating this market space.

Lockheed Martin is one of the pioneers in the combat aircraft space, with its product portfolio constituting some of the most advanced military aircraft like F-35, C-130, F-16, F-22 and a few more. Of these, F-35 is the company’s largest program.

Interestingly, Lockheed boasts a long-term earnings growth rate of 5.7%. In the past year, the stock has gained 29.3%.

On the other hand, Northrop is a renowned manufacturer of autonomous and manned aircraft like MQ-4C Triton and Global Hawk. These jets are used for battle management, strike and intelligence, surveillance and reconnaissance (ISR).

Notably, Northrop boasts a long-term earnings growth rate of 6.2%. In the past year, the stock has gained 46.4%.

Price Movement & Zacks Rank

Boeing’s shares have lost 29.5% in the past year. Textron’s stock has gained 33.2% in the past year against the industry’s decline of 34.6%.

Image Source: Zacks Investment Research

Both Boeing and Textron currently carry 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.