Boeing (BA), Lockheed Martin (LMT) To Part Ways On Future Bomber Work

Analysts at Morgan Keegan say that Boeing (NYSE: BA) and Lockheed Martin (NYSE: LMT) may decide against working together on the development of a next generation bomber.

“When the DoD initially discussed creating a development program for a next generation bomber a couple of years ago, Boeing and Lockheed Martin decided to team up to compete against Northrop Grumman (NYSE: NOC). Now, however, Boeing has indicated that the agreement may be canceled, partly due to the fact that the government may want to see a greater amount of competition for the program,” the analysts say. One of the reasons for BA and LMT to team up was NOC’s superior position due to its success with the B-2 bomber and work on the X-47. However, since then BA and LMT have “advanced their own next generation stealthy UAVs and “the companies appear better able to compete on their own,” the analysts add.

“Given the likely movement to greater dependence on unmanned systems in the future, the DoD may specifically decide to make multiple awards in order to better build up a larger industrial base for the technology. We believe that future development and production in this area may come to represent one of the largest potential opportunities in the defense market going forward,” Morgan Keegan mentions. More Analyst Ratings here