Textron Inc (NYSE: TXT) opened nearly 10% up on Tuesday after the U.S. army picked the Bell V-280 Valor as its future long-range assault aircraft (FLRAA).
Army wants to retire Black Hawks
The U.S. army had been looking for a suitable replacement for 2,000 of its Black Hawks. Bell’s V-280 Valor serves the purpose as it can carry a dozen troops through 400 nautical miles – in line with the army’s requirement. In the press release, Bell CEO Mitch Snyder said:
We’re ready to equip soldiers with speed and range they need to compete and win using the most mature, reliable, and affordable high-performance long-range assault weapon system in the world.
In its latest reported quarter, Textron attributed roughly 25% of its total sales to Bell Helicopters. Its overall revenue for Q3, though, was lower than the Street expectations.
The aerospace stock is now trading just below the price at which it started the year 2022.
Bernstein analyst reacts to the news
According to Doug Harned – Senior Research Analyst at Bernstein – shares of the industrial conglomerate have been released of a key risk now that the government has picked Textron over Lockheed Martin for its next generation helicopters.
Harned is convinced that the “FLRAA” will eventually replace the Black Hawk. Initial contract will bring in $1.30 billion and the programme could generate well over $40 billion in revenues through 2050, he added.
Those interested in buying “TXT” on this stock market news should also know that Wall Street currently rates it at “overweight”. The average price target on the Textron stock is $81, which suggests another 10% upside from here.
The post U.S. army picks Textron over Lockheed Martin for a big contract appeared first on Invezz.
