Boeing stock gains as Trump admin awards it fighter jet contract

Investing.com -- It was announced Friday that Boeing (NYSE:BA) has been awarded the U.S. Air Force’s Next (LON:NXT) Generation Air Dominance (NGAD) 6th generation fighter jet contract, sending the company's shares up around 4%.

In contrast, shares of Lockheed Martin (NYSE:LMT), which lost out on the award, dropped more than 5% on Friday.

The contract, worth more than $20 billion, will see Boeing develop a crewed next-generation fighter designed to operate alongside drones. Boeing is expected to deliver 150-200 6th generation fighters, named the F-47.

The NGAD program aims to replace Lockheed Martin’s F-22 Raptor and strengthen U.S. air capabilities against adversaries.

"The F-47 will be the most advanced, most capable, most lethal aircraft ever built," said U.S. President Donald Trump. "An experimental version of the plane has secretly been flying for almost 5 years and we're confident that it massively overpowers the capabilities of any other nation."

For Boeing, the deal represents a significant victory at a time when the company has faced challenges in both its commercial and defense operations.

"In preparation for this mission, we made the most significant investment in the history of our defense business, and we are ready to provide the most advanced and innovative NGAD aircraft needed to support the mission," said Steve Parker, interim president and chief executive officer, Boeing Defense, Space&Security.

The award is expected to provide a much-needed boost to its St. Louis-based fighter jet production business, which has struggled with underperforming defense contracts in recent years.

BofA Securities analyst Ronald Epstein called this a "much-needed win" for Boeing but said execution is paramount. "For Boeing, this is a major win under new CEO Kelly Ortberg and gives the company’s defense business a foothold for the next decades," Epstein commented. "That said, execution is the biggest risk ahead."

Secretary of Defense Pete Hegseth stated, "This is a big day for our warfighters. This is a big day for our country, a big day in the world." He added, "America is going to have generations in the future of air dominance because of this sixth-generation fighter."

Lockheed’s failure to secure the contract raises questions about its future in high-end fighter development.

The company was recently eliminated from the U.S. Navy’s competition for its next-generation stealth fighter, adding to its challenges in maintaining a dominant position in the defense sector.

Epstein thinks Lockheed could protest the win; however, "major wins are typically not announced by the president at the White House – which could be a hurdle to a potential challenge."

(Sam Boughedda contributed to this article)

This article first appeared in Investing.com