Boeing (BA) lost out on a Pentagon contract late Tuesday to develop a new interceptor to protect the U.S. against intercontinental ballistic missile threats. But Boeing stock rose Wednesday.
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Instead, Lockheed Martin (LMT) and Northrop Grumman (NOC) won the Next Generation Interceptor contract for technology development and risk reduction.
Lockheed’s contract is worth $3.7 billion through August 2025, and Northrop’s is worth $3.9 billion through May 2026. The two defense giants will later compete against each other for a future procurement contract.
“By planning to carry two vendors through technology development, MDA will maximize the benefits of competition to deliver the most effective and reliable homeland defense missile to the warfighter as soon as possible,” Vice Adm. Jon Hill, director of the Missile Defense Agency, said in a release. “Once fielded, this new homeland defense interceptor will be capable of defeating expected threat advances into the 2030s and beyond.”
Lockheed also worked with Aerojet Rocketdyne (AJRD), which Lockheed is buying. Northrop Grumman teamed up with Raytheon Technologies (RTX).
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Boeing Stock
Shares rose 2.3% to 246.70 on the stock market today. Boeing stock is back above a 244.18 buy point, according to MarketSmith chart analysis. Lockheed stock gained 2.2%, and Northrop added 2.2%.
The Next Generation Interceptor will replace the interceptors for the current Ground-based Midcourse Defense system, which is located in Fort Greely, Alaska and Vandenberg Air Force Base, Calif.
Boeing is the prime contractor for that system and won a $6.6 billion contract in 2018 to replace it. But the Pentagon canceled the Redesigned Kill Vehicle program last year over technological issues.
“Boeing is disappointed the U.S. Missile Defense Agency did not advance our team to the next phase of competition in the development of the Next Generation Interceptor competition,” the company said in a statement.
“Our proposal to upgrade the current Ground-based Midcourse Defense system leveraged the company’s 60-plus years of experience with missile and weapon systems to deliver an NGI solution that emphasized an innovative design with enhanced flexibility and modularity.”
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