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BAE Systems (BAESY) Wins Deal for Amphibious Combat Vehicles

·3-min read

BAE Systems plc’s BAESY business unit, BAE Systems Land & Armaments L.P., recently clinched a modification contract involving Amphibious Combat Vehicles (ACVs). Valued at $87.9 million, the contract is projected to be completed in July 2025.

Details of the Deal

The deal has been awarded by the Marine Corps Systems Command, Quantico, VA. Per the terms, BAE Systems is accountable for the procurement of labor and material for the ACV Mission Role Variant Medium-Caliber Cannon (ACV-30) for post-critical design, review and development. The contract also includes production representative test vehicles and support for test activities.

The work involved in the deal will be carried out at multiple locations across the United States.

Growth Prospects for BAE Systems

BAE Systems’ ACV is designed in a way that can fulfill the complex mission objective of deploying Marines from the ship to the shore. It represents a unique mix of true open-ocean amphibious capability, land mobility, survivability, payload and exhibits tremendous growth potential to accommodate the evolving operational needs of the United States Marine Corps (“USMC”).

Additionally, from its family of ACV, ACV-30 mounts a stabilized, medium-caliber weapon system that tends to provide the lethality and protection the Marines need while leaving ample room for troop capacity and payload. This may have attracted the USMC and thus resulted in multiple contract wins for BAE Systems. The latest contract win is a treatment to that.

Per the report from Research and Markets, the military amphibious vehicle market is projected to expand at a CAGR of 6% during the 2022-2027 period.

Such growth opportunities for the military amphibious vehicle market are likely to benefit BAESY going forward, and the company may continue to witness a steady flow of contracts from the USMC involving the ACV, which, in turn, should boost its revenue generation prospects.

Price Movement

In the past year, shares of BAE Systems have rallied 22.1% compared with the industry’s growth of 8.8%.

 

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Zacks Rank

BAE Systems currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same industry are AerSale ASLE, Embraer S.A. ERJ and TransDigm Group Incorporated TDG. While ASLE and TDG stocks each carry a Zacks Rank #2 (Buy), ERJ sports a Zacks Rank #1 (Strong Buy) You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AerSale’s 2022 earnings has been revised upward by 47.7% from the year-ago period. ASLE delivered an earnings surprise of 211.11% in the last reported quarter.

AerSale’s bottom line outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 156.22%. Its shares have rallied 50.4% in the past year.

Transdigm boasts a long-term earnings growth rate of 24.3%. The Zacks Consensus Estimate for Transdigm’s 2022 sales suggests growth of 12.9% from the prior-year reported figure.

Additionally, the Zacks Consensus Estimate for Transdigm’s 2022 earnings implies growth of 37.5% from the prior-year reported figure. TDG shares have risen 12.3% in the past year.

Embraer beat the Zacks Consensus Estimate in the last reported quarter, representing an earnings surprise of 520%. Over the last four quarters, the company has surpassed earnings per share estimates, with an average surprise of 167.6%.

Also, the Zacks Consensus Estimate for Embraer’s 2022 earnings suggests growth of 240% from the prior-year figure. ERJ shares have returned 13.4% to its investors in the past three months.


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EmbraerEmpresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report
 
Transdigm Group Incorporated (TDG) : Free Stock Analysis Report
 
Bae Systems PLC (BAESY) : Free Stock Analysis Report
 
AerSale Corporation (ASLE) : Free Stock Analysis Report
 
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