Boeing (BA) Secures a $7.5B Contract to Aid JDAM Program

27.05.24 13:39 Uhr

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The Boeing Company’s BA defense business unit, Boeing Defense Space and Security, recently secured a contract involving Joint Direct Attack Munition (JDAM). The Air Force Life Cycle Management Center, Hill Air Force Base, UT, has awarded the contract.Details of the DealValued at $7.48 billion, the contract is expected to be completed by Feb 29, 2030. Per the terms of the deal, Boeing will supply JDAM tail kits, spares, repairs, technical and Laser Joint Direct Attack Munition sensor kits. Work related to this deal will be executed in St. Louis, MO.What’s Favoring Boeing?Nations are reinforcing their military capabilities to strengthen their defense structure in the growing threat environment. In this context, increased spending has been witnessed on missile capabilities, resulting in a significant order inflow for companies like Boeing, which enjoys a dominant position in the development of missiles.To this end, it is imperative to mention that Boeing has served the United States by producing, integrating and supporting precise, long-range and focused munitions capabilities, in addition to being a prominent aircraft manufacturer. Impressively, to date, Boeing has built more than 500,000 JDAM tail kits, which reflects the solid demand for this munition system. The latest contract win is a further testament to the fact.Apart from JDAM, Boeing builds other munition weapons like Harpoon Block II, Laser JDAM, Powered JDAM and Standoff Land Attack Missile Expanded Response (SLAM ER), which serve the U.S. Air Force, the U.S. Navy, the U.S. Marines and many U.S. international allies.Such a varied number of missiles in its product portfolio has been ushering in solid order flow for Boeing, involving missile production and other associated services like the latest one.Growth ProspectThe global peace index reflects an unstable environment worldwide, with the Russia-Ukraine war continuing for more than two years now, in addition to the ongoing hostility in different parts of the Middle East. This has set the stage for the defense sector to witness rising demand for military products, particularly missiles, as nations worldwide strive to protect their borders from unprecedented attacks.Therefore, the growth prospect for the missile and missile defense systems market remains solid. To this end, the Mordor Intelligence firm projects the market to witness a CAGR of 5% over the 2024-2029 period.Boeing’s proficiency in manufacturing varied precision-strike missiles positions it favorably to capitalize on the growth opportunities offered by the missile and missile defense systems market. Notably, for nearly 25 years, Boeing-built and supported air and missile defense systems have been protecting the nation, warfighters, allies and international partners against threats ranging from intercontinental ballistic missiles to hostile aircraft. BA’s Ground-based Midcourse Defense system is the United States' only operationally deployed missile defense program capable of defending the entire U.S. homeland (including Alaska and Hawaii) against long-range ballistic missile attacks.Opportunities for PeersBoeing apart, other prominent defense contractors that stand to benefit from the expanding missile and missile defense systems market are:Northrop Grumman NOC: Northrop is a prominent developer of missile and counter systems, including strategic deterrents, subsystems and components. Its product portfolio includes the Integrated Air and Missile Defense Battle Command System, the Guided Multiple Launch Rocket System propulsion and warhead subsystems, the Hypersonic Attack Cruise Missile, the Advanced Anti-Radiation Guided Missile and a few other combat-proven products that support missile defense systems.NOC boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for Northrop’s 2024 sales indicates an improvement of 4.6% from the 2023 reported figure.General Dynamics GD: The company’s Ordnance and Tactical Systems unit is the system integrator of the 2.75-inch Hydra-70 family of rockets. It is a key supplier of major strategic and tactical missile programs, ranging from warheads to missile housings to structural components to solid rocket motor cases.GD has a long-term earnings growth rate of 12%. The consensus estimate for General Dynamics’ 2024 sales indicates an improvement of 10.5% from the 2023 reported figure.RTX Corp. RTX: Its business unit, Missiles and Defense, is a prominent U.S. missile maker. RTX’s portfolio includes the AIM-9X Sidewinder missile, the AIM-9X Block II missile, RAM-guided missile weapon system, etc. In a partnership with BAE Systems, it has built the Excalibur artillery projectile, which increases precision, minimizes collateral damage and reduces the logistical burden for artillery forces.RTX boasts a long-term earnings growth rate of 10.6%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 6.2% from the 2023 reported figure.Price MovementIn the past year, shares of Boeing have lost 14.3% compared with the industry’s 6.8% decline.Image Source: Zacks Investment ResearchZacks RankBoeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Highest Returns for Any Asset ClassIt’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.Hurry, Download Special Report – It’s 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 The Boeing Company (BA): Free Stock Analysis Report Northrop Grumman Corporation (NOC): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks

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DatumRatingAnalyst
17.06.2024Boeing OutperformRBC Capital Markets
17.06.2024Boeing BuyJefferies & Company Inc.
12.06.2024Boeing BuyGoldman Sachs Group Inc.
12.06.2024Boeing BuyUBS AG
11.06.2024Boeing OutperformRBC Capital Markets
DatumRatingAnalyst
17.06.2024Boeing OutperformRBC Capital Markets
17.06.2024Boeing BuyJefferies & Company Inc.
12.06.2024Boeing BuyGoldman Sachs Group Inc.
12.06.2024Boeing BuyUBS AG
11.06.2024Boeing OutperformRBC Capital Markets
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31.01.2024Boeing Equal WeightBarclays Capital
17.01.2024Boeing Equal WeightBarclays Capital
08.01.2024Boeing Equal WeightBarclays Capital
27.12.2023Boeing Equal WeightBarclays Capital
21.12.2023Boeing Equal WeightBarclays Capital
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03.01.2023Boeing UnderperformCredit Suisse Group
22.12.2022Boeing UnderperformCredit Suisse Group
03.11.2022Boeing UnderperformCredit Suisse Group
02.11.2022Boeing UnderperformCredit Suisse Group
19.10.2022Boeing UnderperformCredit Suisse Group

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