BAE Systems (BAESY) Wins Deal for Bradley Fighting Vehicles
BAE Systems plc’s BAESY business unit, Land & Armaments, recently clinched a contract for the production of M2A4 and M7A4 Bradley Fighting Vehicles. Valued at $288.2 million, the contract is projected to be completed by Jan 31, 2026.
The deal has been awarded by the Army Contracting Command, Detroit Arsenal, MI. Work locations will be determined with each order.
What’s Favoring BAE Systems?
Rising global security threats have necessitated bolstering military capabilities. Hence, nations are increasingly spending on defense to upgrade military equipment with advanced technology to maintain a capable and competitive defense force. This has led to significant spending on armored combat vehicles due to their versatility and immense usage in military ground missions.
This stands in favor of BAESY as the company’s portfolio boasts a remarkable array of combat vehicles like Bradley Fighting Vehicles, Amphibious Combat Vehicles, CV90, M109A7 and a few more, which adequately fulfill the requirements of combat vehicles.
The company has acted as the manufacturer and systems integrator of the Bradley program for the past 30 years. During the three decades of service, BAESY has provided the program with several survivability upgrades, thus further enhancing the safety of one of the most survivable vehicles in the fleet.
Backed by such efforts, BAE Systems’Bradley Fighting Vehicle, comprising M2A4 and M7A4, has become an integral part of the U.S. Army’s Armored Brigade Combat Team. This has resulted in several contract wins for the company, like the latest one.
Going forward, BAE Systems may continue to witness such order inflows, thus boosting its overall order book and future revenue performance.
Growth Prospects & Peers in Focus
Per the reports from the Fortune Business Insights, the global armored vehicle market is projected to witness a CAGR of 6.2% during the 2022-2030 period. This stands to benefit BAESY as the company excels in manufacturing armored combat vehicles for military ground forces and boasts a wide range of vehicles.
The expanding size of the global armored vehicle market may provide meaningful gains for other defense majors in the industry, as mentioned below:
General Dynamics GD: Its Land Systems is a global leader in designing, engineering, producing, supporting and sustaining tracked and wheeled military equipment. Its product portfolio, which includes the Abrams Main Battle Tank, the Stryker and LAV family of wheeled and specialty vehicles and the AJAX armored brigade of fighting vehicles, enjoys strong demand in the military landscape.
General Dynamics’ long-term earnings growth rate is pegged at 8.9%. Shares of GD have risen 3.1% in the past three months.
RTX Corporation RTX: Its XM30 Combat Vehicle is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield. It provides unparalleled troop protection and features technology.
RTX Corporation’s long-term earnings growth rate is pegged at 8.1%. The Zacks Consensus Estimate for RTX’s 2023 sales calls for growth of 9.6% from the prior-year reported figure.
Price Movement
In the past year, shares of BAE Systems have rallied 41.8% compared with the industry’s growth of 15.1%.
Image Source: Zacks Investment Research
Zacks Rank & Another Stock to Consider
BAE Systems currently carries a Zacks Rank #2 (Buy). Another top-ranked stock from the same industry is Curtiss-Wright Corporation CW, currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2023 earnings indicates a year-over-year improvement of 14.5%. The Zacks Consensus Estimate for 2023 sales calls for a growth rate of 8.7%.
Curtiss-Wright delivered an average earnings surprise of 9.1% in the last reported quarter. Its four-quarter average earnings surprise is 4.08%.
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General Dynamics Corporation (GD) : Free Stock Analysis Report
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