Lockheed Martin Secures $17 Billion Intercontinental Ballistic Missile Defense Contract - J.P. Morgan Upgrades to $518!

Defense stocks are in demand again following Iran's attack on Israel. Lockheed Martin (LMT) is also attracting attention on April 15 with an estimated $17.7 billion major contract from the US Missile Defense Agency (MDA). As the prime contractor, the multi-year contract to supply the Next Generation Interceptor (NGI) is intended to modernize the Ground-Based Midcourse Defense (GMD) program, which includes radars, interceptor solutions and other equipment. Specifically, it is intended to provide protection solutions against rogue states such as North Korea and Iran. The USA is planning to purchase 20 units and the first deliveries are scheduled for 2028. J.P. Morgan expects additional defense funding from the US government for Ukraine, Israel and possibly Taiwan. On April 15, the experts upgraded the share from "Neutral" to "Overweight" with a price target of $518.

The Biden administration plans to spend around $28.4 billion on missile defense in the 2025 budget. On April 11, Lockheed secured a $4.1 billion contract from MDA to advance the development of the Command and Control, Battle Management and Communications (C2BMC) Next system. Here, advanced sensors as well as AI/ML capabilities will create a global, networked and layered missile defense apparatus capable of identifying, tracking and intercepting ballistic missile threats in all phases of flight. It should also be able to better respond to hypersonic threats.

Supply chain problems with the important F-35 fighter jets have been a source of uncertainty to date. Currently, 75 to 110 deliveries are planned for 2024, with software problems causing delays to the TR3 upgrade, which should be available in the third quarter and deliver "leaps and bounds in technological progress". A record order backlog of $160.6 billion acts as a support. The P/E ratio of 17.5 seems attractive. Q1 results are expected on April 23rd in the pre-market.


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