Boeing's Stock Soared After US Air Force Contract: This Analyst Looks At How Much Contract Could Be Worth

Last week Boeing Co (NYSE:BA) won a US Air Force contract to design, build and deliver next-gen fighter aircraft.

The contract award, which "comes at a pivotal time for Boeing," is expected to be worth "deep into the tens of billions of dollars over its multi-decade lifespan," according to Goldman Sachs.

The Boeing Analyst: Analyst Noah Poponak maintained a Buy rating and price target of $213.

The Boeing Thesis: The company was selected for the Next Generation Air Dominance (NGAD) program over Lockheed Martin Corp (NYSE:LMT) to provide the sixth generation of fighter jet aircraft, called F-47, Poponak said in the note.

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While official numbers have not been released, he added that the NGAD contract could be worth as much as $20 billion over the next five years.

"This award comes at a pivotal time for Boeing, as it has not been awarded the prime contractor role on a US fighter jet in decades," the analyst wrote.

Poponak stated there had been concern about Boeing's long-term prospects for its defense segment and the company's recent cost overruns in other development programs.

"The loss for Lockheed means it will continue to face the question of what comes behind the F-35, which has grown to ~25% of earnings," he added.

BA Price Action: Boeing’s shares had risen by 2.97% to $183.40 at the time of publication on Monday.

Read More: Malaysia Aviation Group Orders 30 Boeing 737 MAX Jets, Secures Option For 30 More Amid Rising Southeast Asia Demand

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