Already a finalist to build the next generation of ground-based nukes, Northrop Grumman Corporation NOC is the best bet to do well in a booming defense industry poised to revamp U.S. air power for years to come, a Goldman Sachs analyst predicts.
The Pentagon is asking for more than $20 billion to begin upgrading ICBMs, cruise missiles and aircraft for fiscal year 2018, a relative pittance considering the top line of the big contractors. But that’s just startup money for new systems that will need years of cash to complete, Noah Poponak wrote in an analyst note.
“We think Northrop, today, has the best positioned product set of any defense company we cover, that will likely allow them to grow their top line faster than any defense company we cover over the next 5–10 years,” he estimated.
Northrop Already Has Nice Array Of WMDs
This week, the Pentagon awarded Northrop $329 million and the Boeing Co BA $349 million to begin preliminary tech on the next generation of intercontinental ballistic nuclear missiles, replacing the 50-year-old Minuteman III system.
Related Link: Pentagon Gives Boeing, Northrop Grumman Nearly $700 To Develop Next Gen ICBM
Lockheed Martin Corporation LMT was the only bidder shut out of the ICBM contracts, but it likely will be a player in others. It also may complain about losing the ICBM contract, Poponak says. Here’s a look at the contracts in the pipeline for later this year or early next and Poponak’s take on the contenders:
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Image Credit: "Missile maintenance technicians from the 576th Flight Test Squadron works on a Minuteman III component at Vandenberg Air Force Base, Calif., Feb. 3, 2014. The Minuteman III is regularly tested with launches from Vandenberg in order to validate the effectiveness, readiness and accuracy of the weapon system, as well as to support the system's primary purpose - nuclear deterrence. (U.S. Air Force photo by Staff Sgt. Jonathan Snyder/RELEASED)" By Staff Sgt. Jonathan Snyder (https://www.dvidshub.net/image/1161494) [Public domain], via Wikimedia Commons
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