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Boeing Wins Deal to Offer Training Services for F-15 Program

Zacks Equity Research

The Boeing Company BA recently clinched a modification contract for providing training services related to the F-15 program. Work related to the deal is scheduled to be over by Feb 15, 2021.

Details of the Deal

Valued at $41 million, the contract was awarded by the Air Force Life Cycle Management Center, Wright-Patterson AFB, Ohio. With the latest modification, the total cumulative face value of the contract becomes $229.4 million.

Per the terms of the deal, Boeing will provide contractor-furnished, high-fidelity simulation equipment for F-15C and F-15E Mission Training Center Services to offer simulation capability to train pilots and weapons system operators.

This modification will also offer four additional pilot/weapon systems officer crew stations devices and their associated equipment to support aircrew training requirements.  

Work related to this project will be executed at Nellis Air Force Base, NV.

A Brief Note on F-15

Boeing’s F-15 Strike Eagle is a twin-engine, all-weather tactical fighter aircraft. Its proven design is unbeatable in air-to-air combat with more than 100 aerial combat victories. F-15C and F-15E are two variants of the F-15 Strike Eagle jet.

What’s Favoring Boeing?

Rising territorial disputes worldwide along with heightened threat of terrorism have prompted nations across the globe to enhance their military arsenal, thereby pushing up defense spending substantially. With military aircraft constituting a major portion of a country’s armory, defense contractors that specialize in combat jets are rapidly gaining tractions in recent times.

As Boeing’s key forte lies in manufacturing combat-proven aircraft, it has been securing huge number of contracts from the Pentagon as well as overseas for long, courtesy of its proven expertise in aerospace programs. This, in turn, boosts the company’s defense segment considerably. Evidently, revenues of its Defense, Space & Security (BDS) segment improved 2% year over year to $6.61 billion in first-quarter 2019.

Looking ahead, President Trump proposed fiscal 2020 defense budget in March 2019, which provisioned major war fighting investments of $57.7 billion for aircraft including an investment plan of $1.1 billion for procuring 8 F-15Jets. Such proposed inclusions should usher in more contract wins for Boeing in coming days, like the latest one and in turn are likely to boost the company’s profit margin.

Price Movement

In the past six months, shares of Boeing have gained 11.5% compared with the industry’s 11.4% growth.

 

Zacks Rank & Key Picks

Boeing currently carries a Zacks Rank #3 (Hold). A few better-ranked companies in the same space are Leidos Holdings, Inc. LDOS, Northrop Grumman Corp. NOC and Wesco Aircraft Holdings, Inc. WAIR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Leidos Holdings delivered average positive earnings surprise of 6.81% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has moved 1.1% up to $4.58 over the past 60 days.

Northrop delivered average positive earnings surprise of 18.50% in the trailing four quarters. The Zacks Consensus Estimate for 2019 earnings has climbed 1.8% to $19.29 over the past 90 days.

Wesco Aircraft’s long-term growth estimate currently stands at 12%. The Zacks Consensus Estimate for 2019 earnings has moved 3.7% north to 84 cents over the past 90 days.

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Wesco Aircraft Holdings, Inc. (WAIR) : Free Stock Analysis Report
 
Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
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