Boeing has won a $298 million contract for building a satellite payload prototype and develop new resilient satellite communications architecture for the US Space Force’s Evolved Strategic SATCOM (or ESS) program.
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The ESS program will replace the current Advanced Extremely High Frequency satellites that are made by Lockheed Martin and aims to provide jam-resistant and secure communications for high priority operations in military and national command authorities. Work on the new contract will be performed in El Segundo, California. Boeing (BA) has to complete building the prototypes by 2025.
The company has been a longtime supplier of military communication satellites and is a prime contractor for the Wideband Global SATCOM constellation. It is also working on the Protected Tactical Enterprise Service and Protected Tactical SATCOM programs.
Recently, Goldman Sachs analyst Noah Poponak added Boeing to its Conviction Buy list as he sees a rare cyclical investment opportunity ahead of eventual end-market improvements.
He also noted that the pace of aircraft order cancellations out of the Boeing backlog has slowed significantly and been surprisingly limited for widebody aircraft. Poponak’s $225 price target implies a 34% upside from current levels. (See BA stock analysis on TipRanks)
Overall, the Street has a Moderate Buy analyst consensus for Boeing based on 8 Buys, 8 Holds and 1 Sell. With shares down 48.4% year-to-date, the average analyst price target of $189.56 implies upside potential of 12.9% over the coming year.
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