Lockheed Martin Corp.’s LMT business unit, Aeronautics, recently clinched a modification contract to incorporate the advanced integrated defensive electronic warfare (EW) suite for F-16 aircraft. The award has been offered by the Air Force Lifecycle Management Center, F-16 foreign military sales (FMS) Contracting, Hill Air Force Base, UT.

Valued at $28.4 million, the contract is projected to be completed by Dec. 30, 2029. Work related to this deal will be executed in Fort Worth, TX. The contract includes FMS.

What’s Favoring LMT Stock?

The growing demand for EW systems in the defense sector is driven by escalating global geopolitical tensions. As international conflicts and regional disputes have intensified significantly over the last decade, nations have increased their focus on strengthening their military capabilities. A key area of focus has been the development and modernization of EW systems, which are critical for countering a wide range of threats, including cyberattacks, signal jamming and electronic surveillance.

Notably, the increasing complexity of modern warfare, which now involves not only physical combat but also cyber and electronic threats, has elevated the importance of EW systems. In recent times, notable technological advancements have transformed the nature of EW systems, making them far more sophisticated and effective. These cutting-edge technologies allow for better detection, disruption, and neutralization of enemy communications and radar, giving militaries a distinct tactical advantage on the battlefield.

As a result, many countries are prioritizing the integration of advanced EW systems into their broader defense architectures to ensure that they are prepared for a wide range of modern threats. This must have prompted the Mordor Intelligence firm to predict the global Electronic Warfare market to witness a CAGR of 5.1% during the 2024-2029 period.

This should boost advanced EW solution providers like Lockheed. Notably, the company offers state-of-the-art EW solutions across multiple domains. In terms of LMT’s predominance in the airborne EW industry, it is imperative to mention that Lockheed Martin has fielded more than 3,000 airborne electronic warfare systems over the past 45 years, including electronic support measure (ESM), electronic attack (EA), radar warning receiver (RWR), electronic intelligence, communications intelligence and anti-jam GPS products.  

Some notable EW solutions offered by the company are the AN/ALQ-210 for the U.S. Navy and international MH-60R and the AN/ALQ-217 on the U.S. Navy’s E-2C/D aircraft. Such advanced EW solutions in its product portfolio must have been ushering in solid order flow for LMT, like the latest one, which, in turn, should boost its future revenues.

Prospects for LMT’s Peers

Other defense contractors that are expected to reap the benefits of the expanding EW market are listed below:

L3Harris Technologies LHX: It manufactures electronic warfare systems like AN/ALQ-214 (IDECM) F/A-18 Countermeasure System, Viper Shield AN/ALQ-254(V)1 All-digital Electronic Warfare Suite, CREW Vehicle Receiver/Jammer and The Next Generation Jammer-Low Band.

Notably, the Viper Shield all-digital EW suite is custom designed to be baseline on advanced F-16 Block 70/72 aircraft and maximize their survivability and mission success.  

RTX Corp. RTX: Raytheon's NGJ-MB is a jamming system that improves airborne electronic attack capabilities for EA-18G Growler fighter aircraft. The NGJ-MB is the U.S. Navy's sophisticated electronic attack system designed to destroy enemy technology, such as air defense systems and communication tools.

It is capable of attacking multiple targets simultaneously. The NGJ-MB program completed Milestone C in 2021 and is now in the production and deployment phase.

Northrop Grumman NOC: The company has been providing Naval Airborne Electronic Warfare solutions for more than 55 years now. Some of its EW systems are the ALQ-251 radio frequency countermeasures system and the AN/APR-39 Radar Warning Receiver/Electronic Warfare Management System.

Its AN/ALQ-257 Integrated Viper Electronic Warfare Suite provides full-spectrum radar warning, threat identification and advanced countermeasure capabilities for the F-16 fleet.

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

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

L3Harris Technologies Inc (LHX) : Free Stock Analysis Report

RTX Corporation (RTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research