Lockheed Targets Missile Defense - Analyst Blog

Lockheed Martin Corp. (LMT) recently teamed up with Alaska Aerospace Corp. intending to win the U.S. Missile Defense Agency’s Ground-Based Midcourse Defense (GMD) Development and Sustainment Contract. The Ground-Based Midcourse Defense (GMD) program uses land-based missiles to intercept incoming ballistic missiles.

This is a chance for Lockheed Martin to win back the contract that was awarded to Boeing Co. (BA) in 1998. Boeing, however, was mainly responsible for system development work. Subsequently, the Missile Defense Agency decided to combine system development and operations & sustainment work for GMD into a single contract. As a result, the Missile Defense Agency on May 14, 2010 issued an amended draft request for proposals. The agency will issue a final request for proposals this summer and award the five-year contract in 2011. Conservative estimates put the total value of the contract to approximately $3 billion.

Lockheed Martin along with Alaska Aerospace will have a better chance at winning the contract with their proven experience. The GMD Development and Sustainment Contract will entail development, manufacturing, test, training, operations and sustainment support. Alaska Aerospace would take care of the operations and maintenance services.

Lockheed Martin is a world leader in systems integration and development of air and missile defense systems and technologies, including the first operational hit-to-kill missile. The company makes significant contributions to most major U.S. missile defense systems and is a part of several global missile defense programs.

Headquartered in Anchorage, Alaska, Alaska Aerospace Corporation provides satellite launch and missile defense services. The State of Alaska established the corporation in 1991 to stimulate the growth of the high-technology aerospace industry.

Headquartered in Bethesda, Maryland, Lockheed Martin is a global security company and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

Lockheed Martin remains a key player within the military space and continues to benefit from strong defense spending. The company’s customer base includes the U.S. government, foreign governments and other commercial buyers. Lockheed’s traditional defense focus appears strong, with increasing interest from domestic and international customers.

We currently have a long-term “Neutral” recommendation on the Lockheed Martin stock.