Shares of industrial-defense firm
are hovering Tuesday. Winning an $80 billion contract will try this.
Monday night, the U.S. Army announced it had chosen
(ticker: TXT) subsidiary Bell Helicopter to produce its new long-range assault helicopter. Textron beat a joint bid from
“We are honored that the U.S. Army has selected the Bell V-280 Valor [helicopter] as its next-generation assault aircraft,” mentioned Textron CEO Scott Donnelly in a information launch. “We intend to honor that trust by building a truly remarkable and transformational weapon system to meet the Army’s mission requirements.”
Textron inventory was up 8% in premarket buying and selling, at about $75.50. Lockheed shares have been off about 0.4% whereas
inventory was up 0.2. The
Dow Jones Industrial Average
futures have been flat.
Boeing and Lockheed shares weren’t reacting to the identical extent as Textron as a result of the businesses are far bigger than Textron. Boeing and Lockheed inventory is price roughly $240 billion mixed. A helicopter win or loss doesn’t transfer the needle as a lot for these two.
That isn’t the case with Textron. Coming into Tuesday buying and selling, Textron’s market capitalization was about $15 billion. The win is an even bigger deal.
The complete contract worth over the lifetime of this system may very well be as excessive as $80 billion, in keeping with Seaport Research Partners analyst Richard Safran. “A positive for the winner,” wrote
in a Monday report. It’s impartial for the loser. “No change in our constructive view of [Lockheed] or [Boeing] as a result of losing the contract.”
Safran doesn’t cowl Textron inventory. He charges Boeing shares Buy and has a $186 worth goal for the inventory. He charges Lockheed shares Buy and has a $550 worth goal for the inventory.
Bell Helicopter accounted for nearly 25% of Textron gross sales within the third quarter. Rotary plane is lumped right into a section that features mission methods at Lockheed. That unit accounted for about 23% of third-quarter gross sales.
Boeing stories its protection and area companies as one unit. It accounted for about 36% of Boeing gross sales within the third quarter, however the firm’s industrial plane enterprise is delivering far fewer planes than it did earlier than the Covid-19 pandemic. Investors count on that to alter in coming years.
Coming into Tuesday buying and selling, Boeing inventory was off about 8% thus far this 12 months. Textron inventory was down about 9%. Lockheed shares have been up about 38%, given a lift from rising geopolitical battle corresponding to Russia’s war in Ukraine.