BAE Systems Secures a Contract to Support USS Iwo Jima

BAE Systems Inc. BAESY recently clinched a contract to support the maintenance, modernization and repair of the USS Iwo Jima (LHD 7). The contract covers all required labor, equipment, testing, facilities and quality assurance activities.Valued at $204.2 million, the contract is expected to be completed in February 2028. The award has been provided by the Naval Sea Systems Command, Washington, D.C.The majority of the work related to the contract will be carried out in Norfolk, VA.Benefits of This ContractThis contract strengthens BAE Systems’ role as a key support provider to the U.S. Navy by ensuring steady, long-term work related to fleet maintenance and upgrades. The multi-year nature of the agreement improves revenue visibility through 2028 and supports stable cash flows from service-related activities. Work on the USS Iwo Jima also helps maintain BAE Systems’ presence in an important naval region, which can support ongoing relationships and create opportunities for future maintenance and modernization contracts.Growth Prospects for BAESYAccording to a report from the Mordor Intelligence firm, nations across the globe are fortifying their defense spending on military weapons and arsenals as they look to strengthen their defense capabilities. This also includes augmented spending on navy ships for enhanced sea warfare capabilities. Mordor Intelligence also forecasts that the naval vessels market will witness a compound annual growth rate of 6.46% during the 2025-2030 period.Such increased spending tends to benefit BAE Systems as its Platforms & Services business manufactures and upgrades combat vehicles, weapons and munitions and provides naval ship repair.Such features may have resulted in multiple contract wins for BAE Systems.Opportunities for Other Defense StocksSome other defense players that can gain from the expanding naval vessel market are discussed below.Lockheed Martin LMT: Lockheed’s Rotary and Mission Systems unit supports integrated warfare systems and sensors programs such as the AEGIS Combat System, the Littoral Combat Ship and Multi-Mission Surface Combatant for the U.S. Navy and other allies.LMT’s long-term (three-to five-year) earnings growth rate is 11.9%. The Zacks Consensus Estimate for 2026 sales implies growth of 4.2% from the prior-year figure.Huntington Ingalls Industries HII: Huntington Ingalls’ Ingalls Shipbuilding segment constructs amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters for the U.S. Navy and boasts a strong portfolio of products. The Newport News segment is involved in the design and construction of nuclear-powered aircraft carriers and submarines.HII’s long-term earnings growth rate is 14.4%. The Zacks Consensus Estimate for 2026 sales implies growth of 4.9% from the prior-year figure.General Dynamics GD: General Dynamics’ Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy.GD’s long-term earnings growth rate is 13.2%. The Zacks Consensus Estimate for 2026 sales implies growth of 4.1% from the prior-year figure.BAESY’s Price PerformanceIn the past year, shares of BAE Systems have gained 89.7% compared with the industry’s 51.3% growth.Image Source: Zacks Investment ResearchBAESY’s Zacks RankBAE Systems currently has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report Bae Systems PLC (BAESY): Free Stock Analysis Report Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks