Zacks_Analysts' Blog : An Army Contract for Textron - Analyst Blog

AAI Test & Training, an operating unit of Textron Inc. (TXT), has received a task order worth $10.6 million for its Man-Portable Aircraft Survivability Trainer (MAST) from the U.S. Army Program Executive Office for Simulation, Training and Instrumentation.

Under the Simulation, Training and Instrumentation Omnibus Contract II, MAST will be responsible for designing, development, production and testing of 9 first article systems and 41 production systems. With four option years, the contract has a total potential for 300 systems and has a value of $43 million.  

The MAST is interoperable with the AN/AAR-47 Missile Warning System and AN/AAR-57 Common Missile Warning System that helps to detect threat in the aircraft cockpit. It is also interoperable with aircraft instrumentation systems such as the Multiple Integrated Laser System and the AH-64D Longbow Apache Tactical Engagement Simulation System.

AAI’s MAST utilizes a light-emitting diode ultraviolet emitter threat simulator to replicate significant launch characteristics that are associated with an infrared Man-Portable Air Defense System (MANPADS). It simulates a surface-to-air missile (SAM) engagement sequence and also records them during live training exercises.

Textron has a strong presence in diverse areas of business jets and other general aviation aircraft, helicopter, aircraft engines, golf carts, turf maintenance equipment, electronic test equipment and blow-molded fuel tanks. We believe Textron should do well in its commercial aerospace businesses with the gradual recovery in the economy.

However, Textron remains exposed to defense spending cuts. Moreover, a slower recovery in the business jet market could lead to deferrals of orders in its backlog. Thus, it presently retains a short-term Zacks #3 Rank (Hold) that corresponds to our long-term Neutral recommendation on the stock. Currently, we would advise investors to hold its peers like Carlisle Companies Inc. (CSL) and Raven Industries Inc. (RAVN) that have a Zacks #1 Rank (Strong Buy) rating.

AAI Test & Training is basically an operating unit of Textron Systems, which is an indirect wholly owned subsidiary of Textron Inc. Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services.