Zacks_Analysts' Blog : Lockheed Submits JAGM Proposal - Analyst Blog

Lockheed Martin Corporation (LMT) submitted a proposal in response to the government's Request for Proposal (RFP) for the next phases of the Joint Air-to-Ground Missile (JAGM) program.

JAGM is the next-generation air-to-surface guided missile that will replace the aging Airborne TOW, Maverick and HELLFIRE family of missiles for the U.S. Army, Navy and Marine Corps.

The U.S. Army Aviation and Missile Command issued the RFP for Engineering and Manufacturing and Low-Rate Initial Production for the JAGM program on April 13, 2011, with a submittal deadline of June 6, 2011. The contract is expected to be awarded during the fourth quarter 2011.

Lockheed Martin has partnered with some of the industry's leading suppliers on the JAGM program. Of them, Aerojet, a GenCorp Inc. (GY) company, will provide the JAGM rocket motor. General Dynamics Ordnance and Tactical Systems, a business unit of General Dynamics Corporation (GD), will provide the multi-purpose warhead.

Work on the JAGM program will be performed in Orlando and Ocala, Florida; and Troy, Alabama; as well as at suppliers' facilities across the U.S.

Based in Bethesda, Maryland, Lockheed Martin is a global security company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The company’s major customers include the U.S. government, foreign governments, and other commercial buyers. The company employs about 133,000 people worldwide.

We maintain our Neutral rating on a long-term basis (6-12 months) on the defense behemoth Lockheed Martin Corporation. Looking ahead, Lockheed expects its fiscal 2011 earnings in the range of $6.95-$7.25 with revenues in the range of $45.8 billion-$47.3 billion.

The Zacks Consensus earnings estimates for the second quarter, fiscal 2011 and fiscal 2012 are $1.92, $7.28 and $8.73, respectively.

Currently, Lockheed Martin has a Zacks #3 Rank, which implies a short-term Hold rating. In the near term the stock is expected to perform in line with the market.