Yahoo Finance Lockheed (LMT) Wins Contract to Support Submarine Program
Lockheed Martin Corp. LMT recently clinched a contract for procuring a submarine electronic warfare system to include modernization kits, equipment and installation. The Naval Sea Systems Command, Washington, D.C., offered the award.
Valued at $27.1 million, the contract is expected to be completed by May 2026. Work related to this contract will be executed in Syracuse, NY.
Lockheed’s Position in the Submarine Market
Amid rising geopolitical tensions across the globe, nations have been strengthening their defense arsenal rapidly to protect their borders from any hostile attack. Submarines form an integral part of any strong defense system as they improve the underwater warfare capabilities of a nation. This has resulted in a strong demand for submarine construction and associated developments across the globe, which has been benefiting defense majors like Lockheed Martin.
Notably, Lockheed designs, develops and integrates submarine combat systems for eight countries around the world, including the United States, United Kingdom, Canada, Brazil, Spain, and others, backed by its 40 years of experience in the submarine combat system domain.
Impressively, Lockheed has developed an engineering and management program named Submarine Warfare Federated Tactical System (SWFTS), which involves various submarine combat subsystems – sonar, radar, communications, weapon control, tactical control navigation and more.
No doubt, the aforementioned factors underscore Lockheed’s significance in the submarine market. The latest contract win is a further testament to that. Such contract wins should boost Lockheed’s revenues in the coming days.
Growth Prospects
Factors like nuclear deterrence, technological advancement in submarines and widespread geopolitical tensions have been prompting a significant surge in the procurement of submarines globally. Mordor Intelligence firm expects the global submarine market to witness a CAGR of more than 4% during the 2024-2029 period.
Such strong growth trends highlight ample growth opportunities for Lockheed Martin. Other defense majors that are likely to benefit from this growth trend are BAE Systems BAESY, General Dynamics GD and Huntington Ingalls Industries HII.
BAE Systems designs, builds, tests, and commissions the most advanced submarines ever operated by the Royal Navy, as well as their state-of-the-art combat systems and equipment. Its Astute class submarines are the U.K.’s largest and most powerful attack submarines and can strike targets up to 621 miles from the coast with pin-point accuracy.
The long-term earnings growth rate estimate for BAE Systems is 12.9%. The Zacks Consensus Estimate for BAESY’s 2024 sales implies growth of 34.1% from the 2023 reported figure.
General Dynamics is a renowned submarine manufacturer. Its Electric Boat unit has been designing and building submarines since 1899, beginning with USS Holland, the U.S. Navy's first commissioned undersea warship.
The long-term earnings growth rate for General Dynamics is pegged at 10.8%. The consensus estimate for GD’s 2024 sales implies growth of 10.1% from the 2023 reported figure.
Huntington Ingalls’ Newport News Shipbuilding is one of two designers and builders of nuclear-powered submarines for the U.S. Navy. It offers fleet services to its submarines around the world, offering modernization, repair and installation services regardless of location.
The long-term earnings growth rate for Huntington Ingalls is 6.5%. The Zacks Consensus Estimate for HII’s 2024 sales implies growth of 2% from the 2023 reported figure.
Price Movement
In the past year, shares of Lockheed Martin have lost 5.8% compared with the industry’s decline of 7.5%.
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Zacks Rank
Lockheed Martin currently carries a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
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