Defense contractor, Lockheed Martin Corporation (LMT) said it has received a $24 million contract from the U.S. Marine Corps to provide new systems and upgrades for its gunnery trainers and Light Armored Vehicles.
Under the contract, Lockheed Martin will supply four new systems and provide upgrades for 36 of U.S. Marine Corps’ gunnery trainers for M1-A1 main battle tanks and LAV-25 Light Armored Vehicles. Marine Corps gunnery trainers, called Combat Vehicle Training Systems, include Lockheed Martin's Advanced Gunnery Training System (AGTS).
Lockheed Martin's Advanced Gunnery Training System, which was developed more than 15 years ago, is a simulator designed to train individuals, crews, platoons and companies in precision gunnery skills, allowing trainees to transition quickly to live fire or combat gunnery. The system offers unique configurations for users to train for their critical missions anytime and anywhere.
Lockheed Martin said the new systems and upgrades under the current contract will provide effective gunnery training for years to come. The new features being deployed on the systems include an upgraded, more realistic visual image-generation system as well as upgrades that reduce the number of instructors required for the training exercises.
Additional upgrades include driver stations for the LAV-25 trainers, trainer usage data and record-keeping capabilities and an upgraded ability to fire M1-A1 weapons in closed-hatch mode to protect against snipers and improvised explosive devices.
Till date, Lockheed Martin has delivered more than 200 AGTS systems and upgrades to the U.S. Department of Defense, with an additional 180 delivered to foreign partner nations.
Headquartered in Bethesda, Maryland, Lockheed Martin is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The company’s customer base includes the U.S. government, foreign governments, and other commercial buyers. The company competes primarily with The Boeing Co. (BA) and Northrop Grumman Corporation (NOC).
Going forward, we expect Lockheed Martin to register a stable performance thanks to a leveraged presence in the Army, Air Force, Navy and IT programs. Lockheed Martin has significant upside potential based on the Obama administration’s focus on Intelligence Surveillance Reconnaissance (ISR), unmanned systems, force protection, cyber security and missile defense.
However, we believe market pessimism is fully accounted for in the current valuation of the defense behemoth, which is priced at a discount to both industry peers and the overall market. We maintain our long-term Neutral recommendation for the stock, which is supported by a short term Zacks #3 Rank (Hold).
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