Defense Stock Roundup: Contract Wins in Focus, LMT, GD and Others Score Big
A generous flow of orders from the Pentagon got the big defense companies going last week. The main indices of the aerospace defense space ended in the green in the last five trading sessions. The S&P 500 Aerospace & Defense (Industry) index rose 1.1%, while the Dow Jones US Aerospace & Defense Index rose 5% over the above period.
Among the highlights of the past week, the main defense companies, Lockheed Martin Corp. LMT, General Dynamics Corp. GD, Raytheon Technologies, Inc. RTX and Huntington Ingalls Industries Inc. HII, made a number of notable deals from the daily Department of Defense funding meeting. In addition, a plausible $ 9 billion deal win approved by the U.S. Senate Committee for Lockheed must also have increased the space for aerospace defense.
A look back at the important stories of the past week
1. Lockheed has signed a $ 375.5 million change agreement to design and develop unique hardware and software for the MH-60R multi-purpose helicopter development program. The deal will serve the Indian government.
The contract is expected to be completed by June 2025 (read more: Lockheed Martin wins a $ 376 million contract to support MH-60R aircraft).
Reuters announced that the Senate Armed Forces Committee has approved $ 9.1 billion for the procurement of 95 Lockheed F-35 aircraft under the 2021 National Defense Authorization Act (NDAA). When required by law, the law allows the Pentagon to complete one or more $ 9.1 billion deals for the F-35 program (read more: Lockheed can courtesy of the Senate Committee $ 9.1 billion Win $ F-35 deal).
2. General Dynamics' Mission Systems unit received a $ 104.2 million order to develop, produce and install the Columbia (US01) and Dreadnought class ballistic missile submarine. The contract was awarded by the Strategic Systems Programs, Washington, D.C.
The entire business-related task is expected to be completed by November 2024 (read more: General Dynamics' unit wins a $ 104 million submarine manufacturing contract).
The company's Land Systems unit received a $ 2.48 billion order to produce Stryker Double V-Hull A1 engineering vehicles and a configuration for proposed changes. Work on the deal is expected to be completed by April 30, 2027 (read more: General Dynamics wins $ 2.5 billion for the Stryker Vehicles Production Deal).
3. Raytheon Technologies has signed a $ 202.6 million contract to support Boeing's (BA) F-15 aircraft. Under the terms of the agreement, Raytheon Technologies will support the depot activation of the APG 82 (V) 1 radar modernization program to support the U.S. Air Force, including depot activation technical services.
The contract is expected to close on December 11, 2024 (read more: Raytheon Technologies wins $ 203 million contract to support F-15 aircraft).
4. Huntington Ingalls' Ingalls Shipbuilding Unit received a third change order worth $ 145.6 million to provide long lead time material and advance procurement activities for the LHA 9 amphibious assault ship. The change now brings the total advance financing for LHA 9 to $ 350 million.
Under the terms of the contract, Huntington Ingalls will procure long lead time material for LHA 9, the fourth LHA (R) America Class amphibious assault ships and the second LHA (R) Flight 1 variant. The entire deal related to the deal is expected to be completed by February 2024 (read more: Huntington Ingalls wins $ 146 million deal to support assault ships).
The defense biggies have had a mixed show in the last five trading sessions. While Boeing and Textron won TXT, Lockheed Martin and L3Harris lost.
The industry has been disappointing in the past six months. Boeing lost most with a 41.1% drop, followed by Raytheon Technologies.
The following table shows the price movements of the main defense players in the past five trading days and in the past six months.
Last 6 months
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General Dynamics Corporation (GD): Free stock analysis report
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