Boeing rises after $20 billion US Navy stealth fighter development contract win
Boeing shares rose nearly 3% to $193.22 premarket after the Pentagon selected the company to build the US Navy’s next-generation stealth fighter, beating Northrop Grumman for a $20 billion development contract.
22 in premarket trading after the company was selected to build the US Navy's next-generation stealth fighter, the Pentagon said on Tuesday. The award marks Boeing's second consecutive major win on fighter jets and ends months of delay over a programme central to US strategy for countering China in the Pacific. JPMorgan kept an "overweight" rating on Boeing, saying the win is important, but that investor focus should stay on boosting commercial aircraft production and cash flow per plane. Boeing beat Northrop Grumman Corp for the development contract, which is worth $20 billion and will be used to produce test aircraft.
Northrop Grumman shares were down about 3% in premarket trade. The brokerage said it does not know much about the $20b+ development contract Boeing won on Tuesday, but management's previously stated commitment to discipline in pursuing new business suggests it has not taken on undue risk. Boeing shares were down about 13% year to date before the previous session's close.