Lockheed Martin Corp. LMT recently secured a modification contract for the Precision Strike Missile (PrSM). The deal has been given by the Army Contracting Command, Redstone Arsenal, AL.
Valued at $59.2 million, the contract is expected to be completed by Sept. 30, 2027. The work related to this contract will be executed in Grand Prairie, TX.
A Note on LMT’s Precision Strike Missile
Lockheed’s PrSM is a long-range missile designed for the U.S. Army capable of neutralizing targets beyond 310 miles. This new surface-to-surface weapon system provides expanded capabilities for attacking, neutralizing, suppressing and destroying targets using missile-delivered indirect fire out. PrSM increases the Joint Force Commander's range, lethality, survivability and missile loadout.
Such notable features of LMT’s aforementioned missile are likely to have boosted demand, further evident from the latest contract win.
What’s Lies Ahead for Lockheed?
Rapidly increasing geopolitical tensions worldwide and heightened regional conflicts in different parts of the globe have prompted nations to bolster their defense capabilities. Since missiles constitute a large share of a nation’s defense arsenals, countries are investing heftily in advanced missile systems for deterrence and defense.
This is likely to have led the Mordor Intelligence firm to predict that the missile and missile defense systems market will witness a CAGR of 5% during the 2024-2029 period. Such growth opportunities offered by the missile and missile defense systems market should bode well for Lockheed Martin, with its product portfolio consisting of numerous combat-proven missiles and missile systems.
Its Missiles and Fire Control unit is a recognized developer of high-performance missiles. The unit also pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense. Its prominent missiles include Long Range Anti-Ship Missile, Spike NLOS and a few more.
Prospects for LMT’s Peers
Other defense companies that are likely to enjoy the perks of the expanding missile and missile system market have been discussed below:
The Boeing Company BA: For almost 25 years, the company has been providing air and missile defense systems to the United States, its allies and international partners. Its offerings include the Avenger Air Defense System, Aegis Ballistic Missile Defense and Ground-Based Midcourse Defense.
Boeing boasts a long-term (three to five years) earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales implies growth of 25.6% from the 2024 estimated figure.
Northrop Grumman NOC: The company provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and manufactures warheads, fuses, advanced high-speed propulsion systems and other missile components.
Northrop has a long-term earnings growth rate of 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 5.3% from the prior-year reported figure.
RTX Corporation RTX: It is known for its missile defense systems, such as the Patriot and SM-6, which are in high demand globally. The company also has a handful of combat-proven missiles in its product portfolio, such as the TOW missile, Guidance Enhanced Missile, the National Advanced Surface-to-Air Missile System, Tomahawk and Standard Missile 2.
The company’s long-term earnings growth rate is 10.2%. The Zacks Consensus Estimate for RTX’s 2024 sales indicates year-over-year growth of 7.2%.
LMT Stock Price Movement
In the past six months, Lockheed Martin shares have rallied 3.6% against the industry’s decline of 2.9%.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
Lockheed Martin 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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