Lockheed (LMT) Wins Contract to Support F-35 Fighter Jet Program

Core Viewpoint - Lockheed Martin's Aeronautics unit has secured a $63.5 million modification contract for the F-35 fighter jet program, enhancing infrastructure support and developmental flight test activities, expected to be completed by August 2024 [1][2]. Deal Details - The contract is valued at $63.5 million and will support the U.S. Navy, Air Force, Marine Corps, and F-35 cooperative program partners, with most work conducted in Fort Worth, TX [2]. - The modification includes engineering, maintenance, logistics, manpower, and material aid for F-35 Joint Strike Fighter laboratory facilities and flight test activities [2]. Favorable Conditions for Lockheed - Global military capabilities are being reinforced due to increasing threats, leading to heightened demand for military aircraft, particularly Lockheed's F-35, which is recognized as the most lethal fighter jet [3][4]. - Lockheed has delivered 992 F-35 airplanes to date, with a backlog of 373 jets as of March 31, 2024, indicating strong demand in the combat jet market [4]. Growth Prospects - The global military aviation market is projected to grow at a CAGR of 5.2% from 2024 to 2030, presenting significant growth opportunities for combat jet manufacturers like Lockheed [5]. - Lockheed's Aeronautics segment is involved in various aspects of military aircraft, including research, design, development, and support, with a diverse fighter jet portfolio [5]. Peer Opportunities - Other defense companies such as Airbus, Boeing, and Northrop Grumman are also positioned to benefit from the expanding military aviation market [6][7]. - Airbus has delivered 1,783 military aircraft as of December 31, 2023, and has a long-term earnings growth rate of 17.9% [6]. - Boeing's product portfolio includes various combat-proven aircraft, with a long-term earnings growth rate of 25.5% [7]. - Northrop Grumman has received significant awards in 2023, including $2.1 billion for F-35 programs, and has a long-term earnings growth rate of 8.7% [7]. Stock Performance - Over the past year, Lockheed Martin's shares have increased by 3.2%, contrasting with a 10.9% decline in the industry [9].