Lockheed Clinches a $4.9B Contract for Precision Strike Missile

Lockheed Martin Corp. LMT recently secured a contract for the production of the Precision Strike Missile (PrSM) Increment One. The award has been provided by the Army Contracting Command, Redstone Arsenal, AL.

Valued at $4.94 billion, the contract is expected to be completed by March 30, 2030.

Significance of LMT’s Precision Strike Missile

Lockheed’s PrSM is a long-range missile designed for the U.S. Army and capable of neutralizing targets beyond 499 kilometers. This new surface-to-surface weapon system provides expanded capabilities for attacking, neutralizing, suppressing and destroying targets using missile-delivered indirect fire. PrSM increases the Joint Force Commander's range, lethality, survivability and missile loadout.

Such notable features of LMT’s aforementioned missile are likely to have boosted its demand, further evident from the latest contract win.

LMT’s Growth Prospects

Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems, backed by the rapid development of advanced missile technologies over the last decade.

This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the global missiles and missile defense systems market during the 2025-2030 time period.

Such market projections offer solid growth opportunities for Lockheed, with its Missile and Fire Control unit being a globally recognized developer of high-performance missiles. The unit pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense air and missile defense programs, in addition to the PrSM.

Prospects of LMT’s Peers

Other defense companies that are likely to enjoy the perks of the expanding global missiles and missile system market have been discussed below.

Northrop Grumman Corporation NOC: Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.

Northrop has a long-term (three to five years) earnings growth rate of 4.2%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 3%.

RTX Corporation RTX: It is well known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.

RTX has a long-term earnings growth rate of 9.7%. The Zacks Consensus Estimate for RTX’s 2025 sales indicates year-over-year growth of 4.4%.

The Boeing Company BA: Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft. It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger.

Boeing has a long-term earnings growth rate of 17.4%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 25.7%.

LMT Stock’s Price Movement

Lockheed’s shares have lost 1.2% in the past month against the industry’s 0.8% growth.

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LMT’s Zacks Rank

Lockheed currently carries 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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This article originally published on Zacks Investment Research (zacks.com).

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