Boeing Secures a Contract for Sustainment of KC-46 Tanker Aircraft

The Boeing Company BA recently clinched a modification contract to provide operational and sustainment services for KC-46 aerial refueling tanker jets. The award has been provided by the Air Force Lifecycle Management Center, Wright Patterson AFB, OH. Valued at $43.6 million, the contract is expected to be completed by Dec. 31, 2027. Work related to this deal will be carried out in McConnell Air Force Base, KS; McGuire AFB, NJ; and Travis AFB, CA.What’s Favoring BA Stock?Increasing defense spending by developed nations and rising geopolitical tensions, such as ongoing hostilities in the Middle East, have been driving the need for long-range combat operations. Tanker aircraft play a vital role in these operations, enabling fighter jets, bombers and surveillance aircraft to operate without fuel limitations. Resultantly, the tanker aircraft market has expanded significantly in recent times, buoyed by the growing emphasis on long-range missions, rising military expenditures by developing nations and advancements in air-to-air refueling systems.To this end, the Mordor Intelligence firm projects a compound annual growth rate (CAGR) of 6.4% for the global tanker aircraft market from 2024 to 2029, highlighting growth opportunities for leading aerospace manufacturers like Boeing. Notably, BA’s KC-46 Pegasus tanker remains a major player in this market. This wide-body, multi-role tanker is compatible with all U.S. allied and coalition military aircraft using international refueling protocols. Integrated with advanced data links and the Advanced Battle Management System, the KC-46 provides multi-domain connectivity, tactical situational awareness and real-time information superiority. These capabilities have significantly boosted demand for the tanker, driving strong order growth. This is further evidenced by the latest contract win.This tanker’s solid prominence in the tanker aircraft market can be further gauged from the fact that since 2019, Boeing has delivered 89 KC-46As to the U.S. Air Force and four to the Japan Air Self-Defense Force (as of November 2024). We may expect Boeing to win more such contracts related to the production, delivery and sustainment of KC-46 tanker aircraft in the days ahead. This, in turn, should significantly bolster this jet giant’s operating results in the quarters ahead.Opportunities for BA’s PeersOther prominent aerospace players that have a strong presence in the tanker aircraft market and thus can be expected to gain from its expansion are discussed below:Airbus Group EADSY: The company's A330 MRTT is an ideal replacement for aging strategic tankers. It offers enhanced range, payload and fuel offload capabilities for unparalleled mission flexibility and versatility. During a four-hour flight over 1,000 nautical miles from takeoff, it can deliver 50 tons of fuel to a variety of receivers.Airbus has a long-term (three to five years) earnings growth rate of 9.4%. The Zacks Consensus Estimate for EADSY’s 2025 sales calls for an improvement of 10.1% from the prior-year estimated figure.Lockheed Martin Corp. LMT: The company’s KC-130J is a versatile military tanker aircraft. It provides aerial refueling support with a maximum fuel capacity of 61,364 pounds. Its enhanced fuel capacity, reliability and modern avionics make it essential for extended-range operations.Lockheed boasts a long-term earnings growth rate of 4.4%. The Zacks Consensus Estimate for LMT’s 2025 sales suggests an improvement of 4.1% from the prior-year projected figure.Embraer S.A. ERJ: The company’s KC-390 Millennium is a tactical multi-mission tanker aircraft. It can support a range of missions and provides significantly reduced crew workload, efficiency and precision for mission accomplishments.Embraer delivered an average earnings surprise of 127.28% in the past four quarters. The Zacks Consensus Estimate for ERJ’s 2024 sales suggests an improvement of 18.6% from the prior-year reported figure.BA Stock’s Price MovementIn the past three months, shares of Boeing have gained 8.8% against the industry’s decline of 6.9%.Image Source: Zacks Investment ResearchZacks RankBoeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>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 The Boeing Company (BA): Free Stock Analysis Report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Embraer-Empresa Brasileira de Aeronautica (ERJ): Free Stock Analysis Report Airbus Group (EADSY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks