BAE Systems (BAESY) Wins Contract for Bradley Fighting Vehicles
BAE Systems plc’s BAESY Land & Armaments LP, York, PA clinched a $113.07 million modification to contract W56HZV-22-F-0413 for M2A4 and M7A4 Bradley Fighting Vehicles. The contract is projected to be completed by Jan 31, 2025.
Army funds totaling $113.07 million were already committed to the purchase of weapons and tracked combat vehicles for fiscal 2022 and 2023 at the time of the grant. The contract was awarded by the Army Contracting Command, in Detroit Arsenal, MI. Work related to this contract will be carried out in York, PA.
Importance of Bradley Fighting Vehicles
The Bradley Fighting Vehicle is a combat proven platform that provides outstanding survivability, mobility and lethality, and is an integral part of the U.S. Army’s Armored Brigade Combat Team (ABCT). The most modern, cutting-edge Bradley has the most recent digitalized electronics for ABCT's best situational awareness, network connectivity and communication.
For more than 30 years, BAE Systems has served as the Bradley program's systems integrator, introducing a variety of improvements in accordance with customer demands and mission specifications.
During the course of the Bradley program, there have been several survivability enhancements, installation of underbelly protection and Bradley Urban Survivability Kits. These initiatives have significantly improved the safety of one of the fleet's most resilient vehicles. BAE Systems continues to win contracts for the Bradley Fighting Vehicles from the Defense department.
Growth Prospects
The defensive landscape of a nation is constantly evolving to satisfy the ever more divergent needs for military missions. In that context, a surge in demand is expected as the combat proven vehicle capable of efficiently carrying out land military missions is more widely used.
The Armored Vehicle Market is expected to experience significant growth due to the increasing emphasis on protecting soldiers from both internal and external threats.
According to a Custom Market Insights study, the size of the global armored vehicles market is anticipated to witness a CAGR of 6.36% to reach $27.83 billion by 2030. Global armored vehicles market share revenues were valued at approximately $19.89 billion in 2022 and are expected to reach $20.88 billion in 2023. Therefore, BAE Systems is expected to benefit from this growing market as it enjoys an established position in the combat vehicle market.
A couple of other defense majors that may reap the benefits of the combat vehicle market’s growth are General Dynamics GD and Raytheon Technologies RTX.
In July 2023, General Dynamics’ business unit, Land Systems, clinched a $257.6 million modification contract involving the M10 Booker Combat Vehicle, earlier known as Mobile Protected Firepower. Per the deal, the company will be engaged in the second phase of the Low-Rate Initial Production of 26 M10 Booker Combat Vehicles. The contract has been awarded by the U.S. Army.
GD’s long-term (three- to five-year) earnings growth rate is 8.9%. It delivered an average earnings surprise of 3% in the last four quarters.
In July 2023, Raytheon and Team Lynx were selected to advance their design for XM30 Combat Vehicle. Raytheon, an RTX business, is advancing to the next phase of the U.S. Army’s XM30 Combat Vehicle competition as a member of the American Rheinmetall Vehicles-led Team Lynx. American Rheinmetall Vehicles was awarded an U.S. Army contract in excess of $700 million to proceed through phases three and four of the five-phase competition, formerly known as the Optionally Manned Fighting Vehicle.
RTX’s long-term earnings growth rate is 7.88%. It delivered an average earnings surprise of 7.9% in the last four quarters.
Price Movement
In the past month, shares of BAE Systems have risen 5.5% against the industry’s decline of 3.3%.
Image Source: Zacks Investment Research
Zacks Rank & Stock to Consider
BAE Systems currently carries a Zacks Rank #3 (Hold).
A better-ranked stock from the same industry is Curtiss-Wright Corporation CW, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2023 earnings per share indicates a year-over-year increase of 11.6%. It delivered an average earnings surprise of 4.1% in the last four quarters.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
General Dynamics Corporation (GD) : Free Stock Analysis Report
Bae Systems PLC (BAESY) : Free Stock Analysis Report
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
