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Boeing Wins $150M Missile Defense Contract for GMD System

The Boeing Company BA recently secured a modification contract for the Ground-based Midcourse Defense development and sustainment. The deal has been awarded by the Missile Defense Agency, Huntsville, AL.

Valued at $150 million, the contract is expected to be completed by Jul 30, 2023. Per the terms, the jet giant will offer development, fielding, test, systems engineering, integration and configuration management, equipment manufacturing and refurbishment, training and operations and sustainment for the Ground-based Midcourse Defense (GMD) weapon system.

Significance of GMD

The system is the United States' only operationally deployed missile defense program capable of defending the entire homeland from long-range ballistic missile attacks. It is designed to detect, intercept and destroy long-range ballistic missiles during the midcourse phase of flight.

GMD forms an integral element of the U.S. Missile Defense Agency's layered ballistic missile defense architecture. Being its prime contractor, Boeing designs, produces, integrates, tests and sustains all GMD components deployed across 15 time zones.

Missile Defense & Boeing

Increasing geopolitical tensions along with a rapid rise in terrorism across the globe are prompting nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense is nowadays playing a pivotal role in a nation’s defense strategy.

Particularly, rogue nations like North Korea and Iran seek dangerous capabilities, including long-range ballistic missiles that can threaten the U.S. homeland, support regional aggression, and deter potential U.S. responses.
Thus to protect its homeland, the U.S. government has adopted layered missile defenses. Apart from being a leader in the commercial aerospace market, Boeing has contributed significantly to United States’ missile defense strategy and its GMD forms the first layer in the U.S. homeland missile defense architecture.

Boeing is upgrading its GMD system. Initially fielded in 2004, the GMD system is currently undergoing life extension and will be improved with the addition of the Next Generation Interceptor (NGI), starting in 2028.

Market Prospects

Impressively, the rocket and missile market is projected to grow from $55.5 billion in 2017 to $70 billion by 2022, at a CAGR of 4.74%, per a forecast made by Markets and Markets.

With the United States being one of the key players in the global defense space, such projections indicate a golden era for the nation’s premier defense contractors like Boeing, Lockheed Martin LMT, Raytheon Technologies RTX and Northrop Grumman NOC.

Price Performance

In a year’s time, shares of Boeing have plunged 50.6% compared with the industry’s decline of 34%.

Zacks Rank

Boeing 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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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report
 
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