BAE Systems (BAESY) Wins Deal for Amphibious Combat Vehicles
Zacks Investment Research | Dec 27, 2021 03:30AM ET
BAE Systems (OTC:BAESF) plc’s BAESY business unit, BAE Systems Land & Armaments L.P., recently clinched a modification contract, involving the Amphibious Combat Vehicles (ACV). Valued at $169.3 million, the contract is projected to be completed in August 2023.h3 Details of the Deal/h3
The deal has been awarded by Marine Corps Systems Command, Quantico, VA. Per the deal, BAE Systems is accountable for the procurement and production of 33 full-rate ACVs. The contract also includes fielding and support costs, involving the ACV.
The majority of the work involved in the deal will be carried out in York, PA.
h3 Growth Prospects for BAE Systems/h3BAE Systems’ ACV is designed in a way that could fulfill the complex mission objective of deploying Marines from ship to shore. It represents a unique mix of true open-ocean amphibious capability, land mobility, survivability, payload and also exhibits tremendous growth potential to accommodate the evolving operational needs of the United States Marine Corps (USMC).
Earlier in 2021, BAE Systems was awarded a contract worth $184 million by Marine Corps for 36 ACVs, thus taking the total number of vehicles under full-rate production to 72 for a total value of $366 million.
The ACV program was introduced by Marine Corps Systems Command to replace the aging Assault Amphibious Vehicle. In this regard, it is worth mentioning that the remarkable feature offered by BAE Systems’ ACV, as one of the most adaptable amphibious vehicles that excels in attaining expeditionary mission requirements, attracted the USMC. This resulted in multiple contract wins for BAE Systems after its approval for full-rate production in November 2020. The latest contract win is a treatment to that.
Looking ahead, per the report from Mordor Intelligence, the military amphibious vehicle market is projected to grow at a CAGR of 6% during the 2021-2026 period.
Such growth projection highlights immense potential for ACV manufacturers like BAE Systems. Going forward, BAESY may continue to secure deals from Marine Corps, involving the ACV, thus boosting its revenues from the ACV line of business.
h3 Price Movement/h3In the past year, shares of BAE Systems have rallied 5.8% as compared with the industry ’s growth of 9.1%.
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BAE Systems currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks from the same industry are AAR (NYSE:AIR) Corp. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
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