Teledyne Technologies Incorporated’s TDY business unit, Teledyne FLIR, recently announced that it has neared the delivery completion of 127 PackBot 525 unmanned ground vehicles (UGVs) to the German Army, with final shipments expected in July 2022.
With Germany having recently enhanced its defense spending by $112 billion following the ongoing conflict between Russia and Ukraine, we may expect more order flows for Teledyne from this nation, like the latest one.
What’s Favoring Teledyne?
The PackBot 525 is the most advanced model of Teledyne FLIR's signature ground robot. Its efficiency can be gauged from its multi-tasking abilities, ranging from bomb disposal, close-in surveillance and situations, involving hostages or hazardous materials.
Moreover, this technologically advanced UGV encourages improved communications and tablet-based controller. Also, its common architecture enables the fast connectivity of cameras and other attachments, which eases its wide applications. PackBot also accepts a wide variety of sensors to detect chemical, biological and nerve agents, radiation levels and explosives.
Hence, such enhancements to an already efficient product are likely to witness a northbound demand as nations increase their defense spending to strengthen their defense structures.
Considering the wide applications of the UGV, its demand is poised to escalate going forward as it tends to smoothen military navigation and surveillance tasks and ease military missions significantly in hazardous situations. Per a report from Markets and Markets, the global UGV market is expected to witness a CAGR of 5.7% over the 2022-2027 period.
Such a potential growth enhancement opportunity in the UGV market is likely to usher in more contracts for TDY involving the PackBot 525, which is already an established military product in the global defense landscape. In this context, it is imperative to mention that Teledyne’s PackBot 525 already enjoys a lucrative position in the global military market, with 57 countries commissioning this rugged robot.
A few prominent defense majors that are likely to benefit from the expanding UGV market areNorthrop Grumman NOC, BAE System BAESY and L3Harris Technologies LHX.
Northrop Grumman's Andros FX is a dexterous unmanned ground vehicle designed to defeat a wide range of threats, including vehicle-borne improvised explosive devices. It also features updated system electronics, mobility improvements for increased speed and maneuverability and a new touchscreen operator control unit with 3-D system graphics, advanced manipulator controls and improved user interface.
Northrop Grumman has a long-term earnings growth rate of 6.1%. NOC shares have appreciated 21.8% in the past year.
BAE Systems’ Ironclad has a unique set of capabilities for a UGV. Using high-endurance battery power, it offers near-silent running up to a 50 km range. A modular connection system allows two vehicles to be connected together to handle additional loads, such as a specialized stretcher. It is also protected against blasts and small arms fires to increase mission survivability.
BAE Systemsboasts a long-term earnings growth rate of 7.2%. BAESY stock has rallied 21.4% in the past year.
L3Harris T4 is a versatile, highly mobile UGV with the superior strength and all-terrain, all-weather performance to overcome any challenge.
L3Harris’ long-term earnings growth rate is pegged at 4.4%. LHX stock has appreciated 0.7% in the past year.
In the past year, shares of Teledyne Technologies have declined 17.2% compared with the industry’s fall of 9.8%.
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Teledyne Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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