Lockheed Martin (LMT) Wins Contract for M299 Missile Launcher

Lockheed Martin Corporation LMT recently clinched a $25.9 million contract involving the M299 Launcher. The contract involves providing M299 All Up Launchers and spare parts support for the U.S. Army and international customers. The deal was awarded by the U.S. Army and is expected to be complete by 2025.  

Importance of M299 Launcher

The M299 Launcher is the go-to solution for multiple aircraft and ground platforms for defending, deterring and defeating current and future threats. It provides an affordable multi-platform, multi-mission capability for the HELLFIRE and Joint Air-to-Ground Missile (“JAGM”).

It boasts the capability to operate in severe flight environments, with a digital design that allows interfacing with a variety of platforms. Moreover, the M299 Launcher has the unique ability to recognize and fire all HELLFIRE variants and JAGM in any plausible sequence.

Due to its remarkable features that are well-suited for any military mission, it has been integrated into the AH-64D, AH-64E, Seahawk, Cobra, Tigre and numerous other platforms for the U.S. and international customers. Its strong demand can be gauged from the delivery of more than 6000 of these launchers to varied customers.

Also, the M299 Launcher is currently in service with 29 customers and has an exceeded specified operational reliability of 99% per mission.

Backed by such strong demand, LMT may continue to witness a steady flow of contracts involving the missile launching system. The latest contract win is a testament to the same. This should bolster Lockheed Martin’s revenues from the missile launcher system.

Growth Prospects

The Russia-Ukraine warfare has led many nations to increase their defense spending to strengthen their defense landscape. In this context, missiles, forming an integral part of an efficient defense system, have been witnessing increased demand lately.

Per Mordor Intelligence projections, the missiles and missile defense system market is expected to witness a CAGR of 4.9% over the 2022-2027 period. Such projections further exemplify immense opportunities for Lockheed Martin to capitalize on the expanding market with its missile launching system.

Such abounding growth projections will also benefit other prominent defense majors like Northrop Grumman NOC, Raytheon Technologies RTX and General Dynamics GD.

Northrop Grumman is a prominent developer of missile systems and counter systems, including strategic deterrents, subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea and land-based systems.

Northrop boasts a long-term earnings growth rate of 2.2%. NOC shares have returned 28.2% in the past year.

Raytheon Technologies’ Missiles & Defense is a leading designer, developer, integrator, producer and sustainer of integrated air and missile defense systems. The unit serves as a prime contractor or major subcontractor on numerous missile and related programs with the U.S. Department of Defense.

Raytheon’s long-term earnings growth rate is pegged at 10.4%. The Zacks Consensus Estimate for RTX’s 2022 earnings suggests a growth rate of 9.1% from the prior-year reported figure.

General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It produces composite rocket motor cases and launches tubes for tactical and strategic missiles.

General Dynamics boasts a long-term earnings growth rate of 10.2%. GD shares have returned 11.1% in the past year.

Price Movement

In the past year, shares of Lockheed Martin have rallied 14.9% against the industry’s fall of 21.9%.

Image Source: Zacks Investment Research

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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