Home Most Popular Investing The Sky’s the Limit: Lockheed Martin Corporation (LMT) Bags $663M Deal to Elevate F-35 Fighter Jet Program

The Sky’s the Limit: Lockheed Martin Corporation (LMT) Bags $663M Deal to Elevate F-35 Fighter Jet Program

The Sky’s the Limit: Lockheed Martin Corporation (LMT) Bags $663M Deal to Elevate F-35 Fighter Jet Program

Lockheed Martin Corporation, or LMT, recently clinched a modification contract boosting its F-35 Lightning II aircraft program. The Naval Air Systems Command bestows this $663.1 million award from Patuxent River, MD.

A Closer Look at the Contract

Set to conclude by June 2027, this agreement tasks Lockheed with providing crucial recurring logistics support for the F-35 Lightning II Joint Strike Fighter Air Systems’ sustainability efforts. The support encompasses a wide range of activities from ground maintenance, depot activation, to training system sustainment, to name a few.

Importance of F-35 Jets

The F-35 stands as an unmatched powerhouse – a fighter jet bridging realms to securely share information across air, land, sea, space, and cyber domains. It comes as no surprise that such prowess continues to draw substantial contract wins for Lockheed, further solidifying the F-35 program’s status as a key revenue source for the United States’ top defense contractor.

A look back reveals that the F-35 program single-handedly propelled Lockheed’s Aeronautics business unit’s financials, accounting for 64% of the segment’s net sales in 2023. With almost a thousand F-35 jets delivered so far and a sizeable backlog, the company anticipates strong performance, projecting the delivery of 147-153 jets in 2024 and even more in the years to come. The recent contract, coupled with consistent delivery, sets the stage for significant revenue growth moving forward.

Potential for Growth

Given the escalating geopolitical tensions across the globe, nations are intensifying their defense resources, particularly in acquiring fighter jets. This shift fuels a surge in demand for combat aircraft, offering lucrative prospects for industry players like Lockheed.

Analysts project a promising future, with the global military aviation market expected to expand at a CAGR of 5.23% from 2024 to 2030. Lockheed’s diversified fighter jet lineup comprising the F-35, C-130 Super Hercules, and F-16 Fighting Falcon positions it well to capitalize on this growth trend.

Emphasizing the company’s recent milestones, Lockheed Martin delivered upgraded C-130J-30 Super Hercules tactical airlifters to the Royal Norwegian Air Force and secured an agreement with the Czech Republic government to supply 24 F-35 Lightning II aircraft.

Opportunities for Peers

Other defense firms like Airbus SE, Textron, and Northrop Grumman also stand to benefit from the expanding military aviation market. Airbus focuses on aircraft like A400M and Eurofighter, while Textron specializes in models such as the Beechcraft T-6 and AT-6. Northrop Grumman’s expertise spans manned aircraft development, including renowned projects like the B-2 Spirit stealth bomber.

Each of these companies presents unique growth opportunities. Airbus, for instance, boasts a steady long-term earnings growth rate of 12.4%, while Textron and Northrop Grumman follow suit with rates of 11.7% and 10.1%, respectively.

Stock Performance

Over the past month, Lockheed Martin’s stock exhibited a modest 1.1% rise, outperforming the aerospace and defense industry’s 0.4% growth during the same period.

Zacks Investment Research
Image Source: Zacks Investment Research

Analyst Insight

Presently, Lockheed Martin holds a Zacks Rank of #4 (Sell). For a list of top-performing stocks, including those with a Zacks #1 Rank (Strong Buy), click here.

While the road ahead may hold uncertainties and challenges, for now, Lockheed Martin’s latest triumph marks a significant stride in its ongoing commitment to excellence in defense technology.

As the F-35 program continues to soar to greater heights, investors watch closely, optimistic about the future profits that these well-crafted machines may bring.