Boeing (BA) Secures $96.2M Contract for MH-47G Helicopter
The Boeing Company BA recently secured a modification contract to procure MH-47G renew-build rotary helicopter. The award has been provided by the U.S. Special Operations Command, MacDill Air Force Base, FL.
Valued at $96.2 million, the contract is expected to be completed by July 2027. The majority of work related to this deal will be performed at Ridley Park, PA.
What’s Favoring Boeing?
As nations across the globe continue to strengthen their defense structures, spending on military arms and ammunition that boast technologically advanced features continues to increase manifold. This also includes increased investments in military helicopters that play a critical role in air warfare missions.
To this end, Boeing’s MH-47G, a special operations variant of the CH-47 Chinook multi-role, heavy-lift helicopter, plays an important role. In December 2023, Boeing secured a contract from the U.S. Army Special Operations Aviation Command (USASOAC) for six remanufactured MH-47G Block II aircraft. With this, the company had 42 MH-47G aircraft under contract with USASOAC.
Undoubtedly, the latest contract reflects the solid demand that Boeing’s military helicopters enjoy globally. Such contract wins, in turn, should boost Boeing’s revenue growth from the Boeing Defense, Space & Security segment, which accounted for 32% of the company’s total revenues during 2023.
Boeing’s Prospects in Military Helicopter Market
Rising military conflicts, terrorism, border disputes, territory invasions and violations have forced nations to increase their defense spending toward procuring combat-proven helicopters to enhance their aerial security. Per a report from the Mordor Intelligence firm, the global military helicopters market is expected to witness a CAGR of 2.90% during 2024-2030.
This offers strong growth opportunities for Boeing, with the company offering a robust portfolio of combat-proven helicopters like the AH-6, AH-64 Apache, H-47 Chinook and MH-139A Grey Wolf.
Impressively, in 2023, Boeing delivered 20 CH-47 Chinook, 77 AH-64 Apache and two MH-139 Grey Wolf. With so many combat-proven helicopters in its portfolio, we may expect Boeing to deliver solid delivery figures for its helicopters in coming years as well.
Opportunities for Peers
Apart from Boeing, other companies expected to benefit from the growing military helicopter market are Lockheed Martin LMT, Textron TXT and Airbus Group EADSY.
Lockheed Martin’s Sikorsky business unit provides military and rotary-wing aircraft to all five branches of the U.S. armed forces, along with military services and commercial operators in 40 nations. Its helicopter programs include the Black Hawk, Seahawk and CH-53K King Stallion heavy-lift helicopters.
LMT’s long-term (three to five years) earnings growth is pegged at 4.2%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 2.7% from that reported in 2023.
Textron’s Bell business supplies advanced military helicopters and provides parts and support services to the U.S. government and military customers outside the United States. It offers a robust portfolio of combat-proven helicopters like the Bell 360, V-280, V-22 and many more.
TXT has a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Airbus Group is one of the world's largest suppliers of advanced military helicopters. EADSY’s product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe, H160M, H175M, H215M, H225M and a few more.
EADSY has a long-term earnings growth rate is 12.4%. The consensus estimate for 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Price Performance
In the past year, shares of BA have lost 8.5% compared with the industry’s 7.8% decline.
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Zacks Rank
Boeing currently has a Zacks Rank #5 (Strong Sell).
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