General Dynamics Wins a $191M Deal for Iron Fist Protection System
General Dynamics Corp. GD recently won a contract worth nearly $191.2 million from the Defense Logistics Agency Aviation to provide its Iron Fist Protection System B-kits. The delivery order is expected to be finished by July 31, 2027.
What Lies Ahead for GD Stock?
Active Protection Systems (“APS”) are intended to protect the vehicle on which they are mounted against anti-tank weapons. In recent times, demand for APS has increased significantly, backed by rising military spending by nations worldwide amid widespread geopolitical tensions as well as the growing need for higher survivable and technologically advanced weapon systems against emerging combat threats.
The Mordor Intelligence firm projects the Active Protection Systems market to witness a CAGR of 6.1% during the 2024-2029 period. Such market growth expectations are likely to benefit General Dynamics, which has been a renowned provider of APS for armed forces globally.
Notably, its Iron Fist Light is an active protection system that employs separate optical sensors, tracking radar, launchers and countermeasure weapons to neutralize threats at a safe distance from the protected combat vehicles. The system offers 360-degree protection for close-range circumstances in both open terrain and urban areas. Iron Fist Light's small size and light weight, versatility, excellent performance, ability to reduce residual penetration and ease of connection make it the ideal active protection option for any fighting vehicle.
These features must have been ushering in notable contracts, like the latest one, for GD. Considering the aforementioned market growth opportunities, such contracts are expected to continue to come in the near future, thereby bolstering the company's revenue generation prospects.
Opportunities for GD’s Peers
Considering the solid growth opportunities of the APS market, other defense primes like Lockheed Martin LMT, RTX Corporation RTX and BAE Systems BAESY, with a strong presence in this space, should also benefit.
Lockheed Martin’s Modular Active Protection System (“MAPS”) is the backbone of the U.S. Army. The MAPS base kit provides automated, next-generation survivability to ground combat vehicles and operators. Its base kit combines sensors and countermeasures in an open, shared architecture to detect, track, classify, and defeat current and upcoming threats like rocket-propelled grenades and anti-tank guided missiles.
LMT boasts a long-term (three to five years) earnings growth rate of 4.7%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 5.3% from the previous year's reported figure.
RTX’s Quick Kill Active Protection System comprises a multi-mission fire-control radar that detects and tracks incoming threats, as well as hard-kill countermeasures that act as a hit avoidance system, allowing for multi-tracking and multi-engagement of enemy fire for vehicle and squad protection.
RTX boasts a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 7% from the previous year's reported figure.
BAE Systems’ laser-based TERRA RAVEN countermeasure system destroys incoming threat signals to protect ground vehicles from missile attacks. It is part of a layered defense and response approach that can be readily implemented into current and next-generation combat vehicles.
BAESY has a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for BAESY’s 2024 sales implies growth of 37.4% from the prior-year figure.
GD Stock’s Price Movement
In the past six months, shares of General Dynamics have risen 6.4% against the industry’s 0.9% decline.
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GD’s Zacks Rank
General Dynamics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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