Northrop Grumman Corporation NOC recently secured a $801 million contract to provide virtual and distributed training to Air Force trainers worldwide. This training ranges from daily team training to large-scale exercises. The contract was awarded by the Air Force Lifecycle Management Center, Wright-Patterson Air Force Base, OH.
The work related to this deal will be carried out in Orlando, FL. The contract is expected to be completed by Dec. 11, 2034.
NOC Stock’s Growth Prospects in Military Training
The worldwide military training market is seeing strong growth, driven by the need to prepare for more advanced and complex threats. With rising global tensions, varied nations’ armed forces are actively focusing on training with cutting-edge and advanced technology to stay ready for any unprecedented situation.
This must have led the Morder Intelligence firm to predict that the global military simulation and training market will witness a CAGR of 5.2% during the 2024-2029 period.
NOC is well-positioned to capitalize on the growing military training and simulation market with its advanced virtual and immersive training solutions. Its Live, Virtual and Constructive training capabilities and Combat Electromagnetic Environment Simulator are cost-effective and provide next-generation mission readiness for warfighters.
Notably, its on-demand LVC training framework is integrated into the training of the fifth-generation (F-35) and fourth-generation (F-16) fighter aircraft. The company has more than 20 years of experience in integrating platforms into secure cross-domain environments that extend across the services, strengthening its competitive edge in the training market.
Opportunities for Other Defense Companies
Other defense companies that are likely to enjoy the perks of the expanding military training and simulation market have been discussed below.
CAE, Inc. CAE: Its Defense & Security business unit provides training and mission support solutions across multi-domain operations – air, land, maritime, space and cyber. The company offers Training System Updates to existing military customers, which can help enhance the capability and availability of the training system, and aid in prolonging the useful life of training equipment.
CAE has a long-term (three to five years) earnings growth rate of 15.9%. The Zacks Consensus Estimate for CAE’s fiscal 2025 sales indicates year-over-year growth of 1.8%.
Lockheed Martin Corporation LMT: Its Close Combat Tactical Trainer is the U.S. Army’s first and largest distributed interactive simulation system. Using LMT’s CCTT, military units can train and are validated in tactics, doctrine, weapons systems, mission planning and rehearsals.
Lockheed Martin has a long-term earnings growth rate of 4.5%. The consensus estimate for LMT’s 2024 sales indicates year-over-year growth of 5.5%.
RTX Corporation RTX: Its High-Fidelity Simulation system provides realistic training scenarios for both military and civilian personnel, focusing on enhanced decision-making and tactical readiness. In November 2023, the company launched Arcus, a new image generator that delivers immersive, modular aircrew training.
RTX has a long-term earnings growth rate of 10.2%. The Zacks Consensus Estimate for RTX’s 2024 sales indicates year-over-year growth of 7.2%.
Northrop Grumman Stock’s Price Movement
Shares of NOC have gained 12.4% in the past six months against the industry’s 3.5% decline.
Image Source: Zacks Investment Research
NOC Stock’s Zacks Rank
NOC 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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