Lockheed Martin Shares Sink After Major US Air Force Contract Goes To Boeing: What To Know

Lockheed Martin Corp. LMT shares sold off on Friday after it was announced that Boeing Co. BA was awarded a U.S. Air Force contract to design, build and deliver its next-generation fighter aircraft.

The Details: Reuters reported that Boeing won the $20-billion contract over Lockheed Martin for the Next Generation Air Dominance program which will replace Lockheed Martin’s F-22 Raptor. The contract could result in orders worth hundreds of billions of dollars over its multi-decade lifetime, according to Reuters.

President Donald Trump told reporters in the Oval Office that the new jet's name will be the F-47. He also seemed to imply foreign sales of the jet could be an option for Boeing.

“Our allies are calling constantly. They want to buy them also,” Trump said.

“We’ve given an order for a lot. We can’t tell you the price,” Trump added.

Boeing said the contract is the beginning of a "new generation" of fighter jets with increased "range, survivability, lethality and adaptability" in a statement released later on Friday.

“We recognize the importance of designing, building and delivering a 6th-generation fighter capability for the United States Air Force. 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 CEO, Boeing Defense, Space & Security.

Why It Matters: The F-47 jet contract is another loss for Lockheed Martin which recently was eliminated from consideration to build the next-generation carrier-based stealth fighter for the U.S. Navy.

According to Reuters, President Trump met with Lockheed CEO Jim Taiclet in recent weeks to discuss the company's F-35 amid frustration at the Pentagon over delayed upgrades.

LMT, BA Price Action: According to data from Benzinga Pro, Lockheed Martin shares fell 5.78% on Friday to end the session at $439.77. Boeing shares climbed after news of the contract win broke and closed 3.05% higher at $178.10.

Edge Rankings: Lockheed Martin stock ranks 45.41 out of 100 in Growth and 38.54 out of 100 in Momentum. How does rival defense contractor RTX Corp. rank? Get the full BZ Edge Rankings breakdown here.