The Boeing Company BA recently secured a modification contract involving the MQ-25 air vehicle. The majority of the work related to the deal will be executed in St. Louis, MO.
Valued at $198 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Per the terms, Boeing will carry out the integration of a ground control station that provides command and control capability for supporting the MQ-25 air vehicle.
The entire task is scheduled to be completed by August 2024.
Importance of MQ-25A
Boeing’s MQ-25A, an unmanned aerial vehicle (UAV), is designed to provide the U.S. Navy with much-needed refueling capability, allowing for better use of fighter jets. The UAV extends the combat range of deployed F/A-18 Super Hornet and EA-18G Growler jets of Boeing, and Lockheed Martin’s LMT F-35C fighters.
Cost-effectiveness compared to manned aircraft along with zero mortality, which UAVs offer, has been bolstering demand for military drones. As acts of terrorism increase across the globe, so does the demand for UAVs.
Notably, increasing use of UAVs in various military applications, such as intelligence, surveillance, and reconnaissance (ISR) and electronic warfare has been boosting the military segment of the global UAV market. Interestingly aerial refueling has been one of the primary growth contributors to this space.
Aerospace major Boeing has more than 10 years of experience in unmanned aircraft systems (UAS) flight services and information delivery. Notably, its MQ-25 is the U.S. Navy’s first operational carrier-based unmanned aircraft.
With Boeing being a prominent defense contractor across the globe, it is obvious that increasing demand for UAVs is getting translated into notable contract wins for this jet giant. The latest contract win is a bright example of that.
Opportunities for Peers
The global UAV market is projected to increase from $19.3 billion in 2019 to $45.8 billion by 2025, at a CAGR of 15.5%, as predicted by Markets and Markets research firm.
This should bode well for prominent defense majors like Boeing, Lockheed, Northrop Grumman NOC and BAE Systems Plc BAESY, which dominate the UAV marketplace. Notably, Northrop Grumman’s MQ-4C Triton UAS is equipped to provide real-time intelligence, surveillance and reconnaissance (ISR) over vast ocean and coastal regions. On the other hand, BAE Systems’ Taranis is an unmanned combat aircraft system advanced technology demonstrator programme.
Zacks Rank and Price Movement
In a year’s time, shares of this Zacks Rank #3 (Hold) company have slumped 33.6% compared with the industry’s 19.9% decline. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
The Boeing Company (BA) : Free Stock Analysis Report
Bae Systems PLC (BAESY) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research