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Boeing to Provide Support Services to JDAM/LJDAM Program

Zacks Equity Research

The Boeing Company BA recently secured a $250-million contract for providing technical services, aircraft integration and sustainment services related to the Joint Direct Attack Munition/Laser Joint Direct Attack Munition (JDAM/LJDAM) program. The contract was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.

Work related to this deal will be performed in St. Louis, MI, and is expected to get completed by March 2029.

A Brief Note on JDAM/LJDAM

The Joint Direct Attack Munition (JDAM) is a low-cost guidance tail kit that converts existing unguided free-fall bombs into accurately guided weapons. With the help of JDAM, bombs can be accurately delivered in any weather conditions and launched at a distance from the target. The U.S. Air Force and Navy, and militaries of more than 26 nations employ the JDAM.

The Laser targeted Joint Direct Attack Munition (LJDAM), an enhanced version of the JDAM, has the flexibility to engage both fixed and moving targets.

What’s Favoring Boeing?

Boeing, which is one of the major players in the defense sector, stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Notably, revenues at its Boeing Defense, Space & Security (BDS) unit during the fourth quarter of 2018 increased 16% year over year to $6.11 billion. To this end, the latest contract should enable this division to generate similar top-line growth in the days ahead as well.

Per Grand View Research, the global ammunition market is expected to see a CAGR of 3.5% by 2024, to reach a value of approximately $16 billion. Such growth can be attributed to the rise in terrorism activities accompanied by stacking of arms and weapons in emerging economies, leading to increased defense expenditures.

Price Performance

Shares of Boeing have increased 21.1% in the past 12 months compared to the industry’s growth of 0.1%.

Zacks Rank & Key Picks    

Boeing currently carries Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Spirit Aerosystems Holdings SPR, AeroVironment,
Inc. AVAV and Heico Corp. HEI.

While Spirit Aerosystems sports a Zacks Rank #1 (Strong Buy), Heico and AeroVironment carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Spirit Aerosystems’ long-term growth estimates currently stand at 7.8%. The Zacks Consensus Estimate for 2019 earnings has risen 3.7% to $7.56 in the past 90 days.

Heico Corporation came up with average positive earnings surprise of 4.8% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 2.9% to $2.14 in the past 90 days.

AeroVironment’s long-term growth estimates currently stand at 25%. The Zacks Consensus Estimate for 2019 earnings has risen 16.67% to $1.75 in the past 90 days.

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The Boeing Company (BA) : Free Stock Analysis Report
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
AeroVironment, Inc. (AVAV) : Free Stock Analysis Report
Heico Corporation (HEI) : Free Stock Analysis Report
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