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Boeing (BA) Wins $150M Deal to Support KC-46 Aircraft Program

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The Boeing Company (BA - Free Report) recently won a contract for procuring consumable parts in relation to KC-46 Commercial Common Program. The deal is awarded by the Defense Logistics Agency Aviation, Philadelphia, PA.

Valued at $149.5 million, the contract is scheduled to be completed by Oct 7, 2023. Work related to the deal will be executed in Missouri.

What You Should Know About KC-46

The KC-46 Pegasus is a wide-body, multirole tanker that can refuel all U.S., allied and coalition military aircraft, compatible with international aerial refueling procedures. Boeing initially designed the KC-46 to carry passengers, cargo and patients. The aircraft is also equipped to detect, avoid, defeat and survive threats using multiple layers of protection, which will enable it to operate safely in medium-threat environments.

Rising Demand for Combat Jets Aids Boeing

With growing security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market for sometime now.

It is imperative to mention in this context that military aircraft, both manned and unmanned, forms an integral constituent of a country’s defense products. Notably, emerging trends in the combat aircraft space like the fifth-generation technology aircraft, advanced composite materials, stealth technology along with refueling jets like KC-46 have been driving demand substantially.

Being the United States’ largest jet maker, Boeing thus enjoys a smooth flow of contracts for military jets and its associated upgrades. The latest contract win is an example of the same.

Looking Ahead

Per a Morder Intelligence report, the global combat aircraft market is expected to witness a CAGR of 4% during the 2020-2025 time period. Such growth can be attributed to increasing global threats, geopolitical instabilities and higher spending on defense. These projections should benefit combat jet manufacturers like Boeing, Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Airbus (EADSY - Free Report) .

Price Performance

In a year’s time, shares of Boeing have plunged 56.1% compared with the industry’s decline of 34.8%.

Zacks Rank

Boeing currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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