Lockheed Martin Corporation’s (LMT) business unit, Rotary and Mission Systems (RMS), recently clinched a modification contract involving the AEGIS weapon system. The award has been provided by the Missile Defense Agency, Dahlgren, VA.
Details of LMT’s Deal
Valued at $2.97 billion, the contract is expected to be completed by June 2035. Per the terms of the deal, the RMS unit will continue serving as the Combat Systems Engineering Agent for the Aegis Ballistic Missile Defense program to maintain its operational relevancy.
The company will also conduct studies, develop advanced concepts and deliver computer programs to improve fire control capabilities across all stages, including planning, detection, control, engagement and assessment.
The work related to this deal will be executed in Moorestown, NJ.
What’s Favoring LMT Stock?
Rising military conflicts, terrorism and border disputes worldwide, along with rapid technological advancements, have driven nations to enhance their naval defense capabilities, making naval combat systems a critical part of their defensive strategies. Fleet modernization programs by armed forces worldwide have also been fuelling the demand for advanced naval combat technologies.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 6.5% for the global naval combat systems market during the 2025-2030 period. Such strong market prospects drive growth opportunities for Lockheed, which offers state-of-the-art naval combat systems, including the Aegis.
Notably, the Aegis Combat System is an advanced naval defense system that combines sensors, weapons and command controls to detect and respond to threats. It can handle multiple missions, including defending against air and missile attacks, through its Integrated Air and Missile Defense capability.
Such notable features must have enabled Lockheed to secure contracts for this system from the Pentagon and other U.S. allies, the latest contract being an example.
Aegis apart, LMT’s portfolio includes an Integrated Combat System that can connect sensors, networks and weapons across a distributed naval force afloat and ashore.
Opportunities for Other Defense Stocks
Other defense companies that are likely to benefit from the expanding global naval combat systems market are discussed below:
RTX Corporation (RTX): It provides advanced electronic and combat systems for the DDG 1000 warship. RTX’s offerings include a computing environment, modular enclosures, undersea warfare systems, vertical launching systems, advanced guns and integrated power systems.
RTX’s long-term (three to five years) earnings growth rate is 9.3%. The Zacks Consensus Estimate for RTX’s 2025 sales indicates year-over-year growth of 4.2%.
Huntington Ingalls Industries (HII): Through its Ingalls Shipbuilding segment, the company has been designing and building amphibious ships, guided missile destroyers and national security cutters for more than 85 years.
HII has a long-term earnings growth rate of 11%. The Zacks Consensus Estimate for HII’s 2025 sales indicates year-over-year growth of 3.3%.
Northrop Grumman Corporation (NOC): Northrop delivers products like AQS-24B/C Minehunting, Surface Electronic Warfare Improvement Program Block III, Manta Ray and other navigation systems used in naval combat.
Northrop has a long-term earnings growth rate of 3.3%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 2.8%.
LMT Stock Price Movement
LMT shares have gained 4.3% in the past three months compared with the industry’s 28.9% growth.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
LMT currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity.
Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.
See Stocks Now >>Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
