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Lockheed Martin Corp.’s LMT business unit, Aeronautics, recently clinched a modification contract for the F-35 fighter aircraft. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $41.6 million, the contract is expected to be completed by March 2028. Per the terms of the deal, Lockheed will procure engineering, integration support, hardware, and installation support for flight test instrumentation modifications to F-35 production aircraft.
The majority of work related to this deal will be carried out in Fort Worth, TX.
What’s Favoring LMT Stock?
Global defense spending has surged as nations strengthen their military capabilities, driving demand for advanced weaponry like fighter jets, which are essential for air combat. This trend has significantly benefited Lockheed, a leading manufacturer of combat aircraft, through steady orders from the Pentagon and U.S. allies.
Lockheed’s F-35 fighter jet, renowned as the most advanced fifth-generation aircraft, stands out for its mission readiness and cutting-edge technology. Equipped with advanced sensors and communication systems, the F-35 seamlessly connects air, land, sea, space and cyber domains, enhancing situational awareness.
These exceptional features have fueled strong demand for this jet. As of Sept. 30, 2024, Lockheed had delivered 1,040 F-35 aircraft since the program's inception. The recent contract win underscores the sustained popularity of the F-35 in the global combat jet market, further solidifying its position as a cornerstone of modern air defense systems.
Growth Prospects for LMT
Rising military conflicts, terrorism and border disputes, along with rapid technological advancements in combat jets, have led nations to increase their defense spending on combat-proven jets, which constitute an integral part of their defense structure.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 3.7% for the global fighter aircraft market during the 2024-2029 period.
Such strong market prospects drive growth opportunities for Lockheed, backed by its robust portfolio of combat jets, including the F-16, F-22 and F-21 aircraft, in addition to the F-35 jet.
Opportunities for Other Defense Stocks
Other defense companies that are likely to benefit from the expanding global fighter aircraft market are discussed below.
Northrop Grumman Corporation NOC: It is a leading provider of manned and unmanned air systems. It builds some of the world’s most advanced aircraft, such as the E-2C Hawkeye 2000, A-10 Thunderbolt II, F-5 Tiger Fighter Jet and many more.
