Thu, Dec. 8, 5:57 PM
- Shares of defense giants Lockheed Martin (NYSE:LMT), Northrop Grumann (NYSE:NOC), Raytheon (NYSE:RTN) and General Dynamics (NYSE:GD) slipped in today's trade, giving back a bit of the group's strong gains enjoyed since election day: LMT -2.7%, NOC -3.8%, RTN -1.8%, GD -2.6%.
- Cowen analysts warn that while Pres.-elect Trump's Air Force One criticism likely will not hurt Boeing, his habit of using Twitter as a bully pulpit could pose a bigger risk for LMT and NOC, which have big-ticket defense contracts.
- "This is in line with his campaign comment that he wants to boost defense spending but feels DoD could 'buy smarter,'" Cowen says. "Presumably he won't comment on all defense contracts but will focus on high profile programs. However, given his power as president, this can have an impact on specific programs."
- LMT's F-35 program has long been criticized for its $400B development and acquisition price tag, and NOC's B-21 bomber recently has been hit for not disclosing a fuller estimate on its cost, which analysts estimate at $50B-$80B.
Wed, Dec. 7, 5:45 PM
- Defense Department officials have been preparing a misleading assessment of progress on Lockheed Martin’s (NYSE:LMT) F-35 weapons program, the DoD’s chief tester warns, a position at odds with the Pentagon’s narrative that the program is on course after earlier problems.
- Among several assertions challenged in a DoD draft response to questions about F-35 testing from Senate Armed Services Committee Chairman McCain: Claims that operational combat testing that all weapons systems must pass will start in mid-2018 and be completed a year later are “false,” as the tests will commence “no sooner than late 2018, or, more likely, in early 2019 but could be as late as 2020.”
- Pres.-elect Trump must decide next year whether to meet the Pentagon's request to increase F-35 production to 70 in FY 2018 from 63 this year; Trump, who just complained about "out of control" costs of the new Air Force One, also has raised some questions in the past about the F-35.
Wed, Dec. 7, 9:48 AM
- The U.S. Air Force has awarded Lockheed Martin (LMT -0.1%) a $67.3M contract to provide spares for the Royal Saudi Air Force's F-15 sensor suite.
- Work will be performed at facilities in Florida and California, with deliveries beginning in 2018.
- Meanwhile, Sikorsky has concluded contract negotiations with the Chilean Air Force for six S-70i Black Hawks for its medium-lift helicopter recapitalization program.
Sun, Dec. 4, 6:58 AM
- The Pentagon's chief arms buyer is confident that a proposed three-year block buy of Lockheed Martin (NYSE:LMT) F-35 fighter jets, expected to generate large savings, will go ahead.
- "I can't say what's in the final budget, but I'm very hopeful it will proceed as planned," Frank Kendall told Reuters.
- The block buy would cover more than 400 aircraft and include purchases by the U.S. military and other countries participating in the F-35 program.
Thu, Dec. 1, 4:00 AM
- The EU plans to boost its defense budget to its highest level in over a decade, setting up a €5B fund and sending a signal to Donald Trump that it intends to pay for its own security.
- "This is not about an EU army, this is not about spending on the military instead of social security," European Commission Vice President Jyrki Katainen said. "We face multiplying threats and we must act."
- Related tickers: LMT, RTN, GD, NOC, OA, HII, HON, UTX, ITT, TXT, LLL, COL
Wed, Nov. 30, 10:22 AM
- Lockheed Martin (LMT) sees 7% revenue growth in 2017 and expects annual sales rising 3%-5% over the "next few years."
- Currently gets 60% of sales from DoD and there is "bipartisan support for more defense spending." The company is hopeful the sequestration will be removed from the FY18 U.S. budget.
- Sikorsky integration is proceeding well - on track to achieve $150M in Sikorsky synergies by 2018 - but says helicopter sales will only rebound when oil prices rise.
- Sees F-35 as biggest growth driver over next five years and expects about 50% of F-35 orders to come from outside the U.S.
Tue, Nov. 29, 8:45 AM
- Colombia's civil aviation authority has approved the Offshore and Utility Type Certificate for Sikorsky's (NYSE:LMT) S-76C series (C, C+, C++), S-76D and S-92A helicopters.
- The certificate enables Colombia's commercial aviation operators to add the multi-role helicopters for transportation of workers or cargo.
Mon, Nov. 28, 4:18 AM
- Israel has approved the purchase of 17 Lockheed Martin (NYSE:LMT) F-35 stealth fighter jets from the U.S., bringing its total number on order to 50.
- Although a price wasn't disclosed, it will likely set Israel back at least $1.7B, not including maintenance costs.
- Lockheed is developing three versions of the F-35 Lightning II jets for the U.S. military and nine countries that have already placed orders.
Thu, Nov. 24, 2:47 AM
Mon, Nov. 21, 10:29 AM
Sun, Nov. 20, 4:30 AM
- "Given the outcome of the congressional election and learning more specifically who is (and isn’t) involved as space advisers, I anticipate a larger appetite for a change agenda and a better than expected potential to get at least some of their agenda accomplished," Lori Garver, former No.2 at NASA writes.
- Expected areas of change: i) NASA’s bureaucracy/infrastructure is much too large and expensive. ii) NASA shouldn’t be spending so much money on Earth sciences. iii) The Moon is a better and more important destination than Mars. iv) Entrepreneurial space should play a larger role in all aspects of space. v) Space activities cut across international, civil, military and commercial arenas and should be run out of the White House, by a National Space Council, reporting to Vice President Pence.
- She also takes a few parting shots at the departing administration: "NASA Administrator Charlie Bolden’s perceived lack of enthusiastic support of the White House agenda gave an opening to the opposition. Without a willingness to take on these special interests, the administration made a Faustian bargain to secure congressional support for Earth sciences, technology and commercial crew, in exchange for support of developing a large expendable rocket (the Space Launch System or SLS) and deep space capsule (Orion) for human spaceflight. While these parochial interests still exist, a Trump White House has the opportunity to more effectively defend its own agenda."
- Stocks potentially impacted: AVAV, B, BA, GLOB, HON, I, JEC, LMT, OTCPK:MDDWF, MOG.A, OA, SAIC, SPACE, T
Wed, Nov. 16, 3:48 PM
- The operator of Lockheed Martin's (LMT -0.9%) blimp-like hybrid airships announces its first customer, Canada's Quest Rare Minerals (OTC:QRMLF), which expects to lease seven of the cargo aircraft.
- The deal between operator Straightline Aviation and Quest is valued at US$850M, including fuel costs, over a 10-year period starting in 2019.
- Quest says it plans to use the airships to provide dedicated air services at its Strange Lake complex mine site in northern Quebec.
- LMT has said the airships, which can move 20 tons of cargo and set down on nearly any flat surface, will revolutionize the way oil and mining companies haul equipment to the Arctic and other remote areas without roads.
Mon, Nov. 14, 12:27 PM
- Lockheed Martin (LMT +2.2%) is upgraded to Buy from Hold with a $290 price target, raised from $260, at Stifel, which cites encouraging commentary about 2018 free cash flow and to a lesser degree the outcome of the election, which could drive incremental defense spending dollars to LMT.
- Given LMT's continued strong execution on F-35, Stifel says it is less concerned about recent pressure associated with news that F-35 contract terms were more onerous than expected, and it suspects that higher volumes should additional aircraft be added to LRIPs will offset any modest potential margin pressure in 2018.
Mon, Nov. 14, 9:58 AM
- Stifel upgraded the defense contractor to Buy from Hold based on expectations for defense spending under a Trump administration.
- The firm also hiked Lockheed's (LMT +1.8%) price target to $290 from $260.
Thu, Nov. 10, 6:36 PM
- Northrop Grumman (NYSE:NOC) and L-3 Communications (NYSE:LLL) are upgraded to Overweight from Equal Weight, and Lockheed Martin (NYSE:LMT) is upgraded to Equal Weight from Underweight at Barclays, as the Trump victory arguably gives new life to a bullish trade that's now less based on safe-haven status and more on absolute vs. relative growth.
- Details on budget and national security changes under Trump are scarce, but Barclays believes the market will assign a 100% probability to the prospect of higher defense budgets in the near future; for defense stocks, the near term is not about fundamentals or estimate revisions per se - which the firm thinks will not change much - but instead about the simplistic view that defense spending under Trump will be higher.
- Also, the firm shifts its neutral posture on defense to positive, on the belief that shares stay well bid in short-to-medium term.
Wed, Nov. 9, 5:34 AM
- Donald Trump has called for eliminating the sequester on defense spending and initiating a military buildup, boosting troop levels and the number of ships and aircraft.
- He seeks to fully offset the cost through "common sense reforms that eliminate government waste and budget gimmicks" and additional payments from countries where the U.S. has military bases, including Germany, Saudi Arabia and Japan.
- Premarket movement: LMT +4.5%, RTN +1.7%, GD, BA, NOC, OA, HII, HON, UTX, OTCPK:EADSF, ITT, TXT, LLL, OTCPK:BAESY, OTCPK:FINMY, COL