Teledyne Technologies Inc.’s TDY unit, Teledyne FLIR Defense, recently inked a $31 million contract with Kongsberg Defence & Aerospace, Norway, to supply the former’s Cerberus XL mobile counter-unmanned aerial system (C-UAS). The delivery is aimed at boosting Ukraine's military strength in total C-UAS solution.
Per the contract, Teledyne will deliver the surveillance platforms, as well as software, spares, support and training.
Importance of Cerberus XL C-UAS
The mobile surveillance system boasts the capability to rapidly locate and track UAS targets. The system combines highly sensitive radar sensors with an advanced thermal/visual imaging system. To neutralize and eliminate the threat, Kongsberg then sends information from Cerberus to its remote weapons station.
Military leaders will have improved situational awareness of the area and continuous perimeter security with the help of this durable surveillance system, which is built to survive under environmentally challenging conditions.
TDY’s Prospects in UAV
Nations have been rapidly reinforcing their defense landscapes to strengthen their warfare capabilities over the recent past. Such enhancements include increased spending on defense equipment and arsenals.
In this context, it is imperative to mention that UAS demand has been gaining momentum of late due to its low-cost feature coupled with the zero-mortality rate and its excellent surveillance abilities.
Amid this backdrop, the utilization of UAS seems to be the need of the hour in war-stricken Ukraine, hence bolstering the prospect of UAS manufacturers like Teledyne. Notably, apart from the Cerberus Systems, the Ukraine military will also be provided with Teledyne FLIR’s Black Hornet nano-drone.
Outside Ukraine, other nations are also rapidly boosting their weapon portfolio with UAS, as evident from the broader market forecast. Per a Mordor Intelligence Report, the Unmanned Aerial Vehicles (UAV) market size is estimated to be $15.40 billion in 2023 and is expected to reach $29.66 billion by 2028, witnessing a CAGR of 14% during the 2023-2028 period. Such solid growth projections are likely to benefit Teledyne’s revenue generation prospects in the coming days.
Price Performance
In the past year, shares of TDY have gained 12.6% compared with the industry’s 10.3% increase.
Image Source: Zacks Investment Research
Zacks Rank
Teledyne Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Notable Defense Majors
The aforementioned growth prospects of the global UAV market bode well for other defense players as well. These are:
AeroVironment AVAV: It is a dominant global supplier of unmanned aircraft with sales in over 50 countries. In February 2023, the U.S. Army selected AVAV’s JUMP 20 medium UAS to move forward in the Future Tactical UAS program. In August 2023, AVAV revealed its decision to acquire Tomahawk Robotics, which offers common control solutions for unmanned systems.
The Zacks Consensus Estimate for AVAV’s 2023 earnings per share shows an improvement of 121.4% from the 2022 reported figure. The same for 2023 sales implies an improvement of 23.2% from the 2022 reported figure.
BAE Systems BAESY: Its PHASA-35, an ultra-lightweight, solar-electric High Altitude Pseudo Satellite UAS, completed its successful flight trial in June 2023. It offers an alternative and flexible approach to conventional systems, such as satellites or conventionally powered aircraft for the provision of persistent and cost-effective imagery and communications.
BAESY boasts a long-term earnings growth rate of 14%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 15.7% from the 2022 reported figure.
Lockheed Martin LMT: Its Indago 3 vertical takeoff and landing small UAS is a rapidly deployable, high endurance and high resolution system that provides situational awareness and intelligence collection capabilities for the military. In July 2023, LMT entered into a contract with Armasuisse to provide the Swiss Army with a fleet of Indago 3 small UAS.
LMT boasts a long-term earnings growth rate of 6.5%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 0.9% from the 2022 reported figure.
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