Yahoo Finance Boeing (BA) Wins $115M Deal to Aid MH-47G Helicopter Program
The Boeing Company BA recently clinched a modification contract to procure MH-47G renew build rotary helicopter. The award has been offered by the U.S. Special Operations Command (USSOCOM) MacDill Air Force Base, FL.
Valued at $115.2 million, the contract is expected to be completed by July 2027. Majority of the work related to this deal will be carried out in Ridley Park, PA.
What’s Favoring Boeing?
Recurring geopolitical tensions worldwide, along with the evolving dynamics of modern warfare, which requires swift and agile aerial support, have been prompting nations across the globe to invest more in lethal air forces. To this end, it is imperative to mention that combat helicopters play a critical role in air warfare missions, thanks to their rapid technological advancement over the last decade, which has made them more lethal, survivable as well as adaptable for a wide range of aerial missions.
Consequently, Boeing, being a prominent manufacturer of such new-age military helicopters, has been witnessing a solid flow of orders from the Pentagon and other U.S. allies for its combat-proven rotorcraft. The latest contract win is a bright example of that.
Notably, its MH-47G is a special operation variant of the CH-47 Chinook multi-role, heavy-lift helicopter. In December 2023, Boeing secured a contract worth $271 million from the U.S. Army Special Operations Aviation Command (“USASOAC”) for six remanufactured MH-47G Block II aircraft. With this, the company had 42 MH-47G aircraft under contract with USASOAC, as of 2023-end.
Such contract wins, including the latest one, should boost the top-line performance of Boeing Defense, Space & Security segment, which registered a year-over-year improvement of 6% in the last reported quarter.
What Lies Ahead?
As nations seek to enhance their military capabilities, the demand for multi-role combat helicopters that are capable of performing diverse missions, from reconnaissance to close air support, is also rising. This might have prompted the Mordor Intelligence firm to project that the military helicopters market will witness a CAGR of more than 2.9% during the 2024-2030 period.
Such expanding market prospects should boost Boeing’s growth, thanks to its well-established position in manufacturing combat helicopters like AH-64 Apache, MH-139 and AH-6 light attack helicopter, apart from the MH-47G helicopter. Notably, its AH-64 Apache represents the backbone of the U.S. Army’s attack helicopter fleet and a growing number of international defense forces.
Other defense primes that are expected to reap the benefits of the military helicopter market have been discussed below.
Airbus EADSY is one of the world's largest suppliers of advanced military helicopters. Some of its military helicopters are H125M, H135, H145M, AS565MBe, H160M, H175M, H215M, H225M, etc.
Airbus boasts a long-term earnings growth rate of 17.9%. The Zacks Consensus Estimate for EADSY’s 2024 sales indicates an improvement of 8.2% from the 2023 reported figure.
Lockheed Martin’s LMT Sikorsky business unit provides military and rotary-wing aircraft to all five branches of the U.S. armed forces, along with military services and commercial operators in 40 nations. Some of LMT’s renowned products are Armed Black Hawk, CH-53K, MH-60R, Defiant X, Raider X, S-97 Raider, FireHawk, etc.
Lockheed boasts a long-term earnings growth rate of 4.1%. The consensus estimate for LMT’s 2024 sales indicates an improvement of 3.2% from the 2023 reported figure.
Textron’s TXT Bell business supplies advanced military helicopters and provides parts and support services to the U.S. government and military customers outside the United States. TXT Bell’s primary U.S. government programs are meant for the production and support of the V-22 tiltrotor aircraft and H-1 helicopters.
Textron boasts a long-term earnings growth rate of 10.1%. The consensus mark for TXT’s 2024 sales indicates an improvement of 5.7% from the 2023 reported number.
Price Movement
Shares of Boeing have lost 7.6% in the past three months compared with the industry’s 9.3% decline.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently has 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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