For investors unfamiliar with the space industry, it may be surprising that some of the biggest players are defense contractors. Despite the tradition of military exploration, increasing commercial access has changed the space race for the better.
Today, longtime government sweethearts compete with young and hungry corporations looking to revolutionize space travel. Since 2021, the American space economy has seen $211.6 billion in output and a growth of 360,000 jobs. Though complex, this newly resurging industry holds endless potential and serves as a testbed for continuous technological advancement.
If companies classically based in the aerospace sector do not take advantage of this trend they might be left behind. With this in mind, the U.S. defense-contracting giants continue to compete for their place among the stars. Here are three aerospace stocks in the space industry to watch closely for soaring success.
Lockheed Martin (LMT)
The biggest name in the modern aerospace industry, Lockheed Martin’s (NYSE:LMT) outlook for 2024 gleams with potential. Thanks to steady contracts and excellence in winning new ones, Lockheed Martin’s projects push new frontiers both scientifically and financially.
When watching LMT stock, there are three major projects to look out for this year. First, the continued testing of the X-59 concept plane continues to succeed. This aircraft provides Lockheed and NASA with a testbed for technologies that make supersonic flight possible without the boom. Then there’s LMT’s entry into the Next Generation Air Dominance fighter competition. However, due to current manufacturing woes for the competition, LMT looks like an early winner. Winning this multi-billion dollar defense contract would fuel LMT’s ascent for years to come.
Finally, Lockheed Martin’s T2TL line of surveillance satellites saw increased orders at the end of 2023. All these projects have yet to play out, so for now, the stock sits at a hold rating.
Northrop Grumman (NOC)
Famous for its pioneering of stealth aircraft and lunar modules, Northrop Grumman (NYSE:NOC) comfortably holds 10% of the space market share. NOC’s continuously innovative approach to product design makes it one of the premier aerospace stocks in the space industry. Reliable performance comes at a cost, however, and not even Northrup Grumman’s expertise can prevent cost overruns.
With the announcement that the B-21 Raider program faces budget spirals, Northrop Grumman’s stock took a hit this week. Regardless, Northrup’s persistent success in the satellite field overshadows this near 7% dip. In the last three days alone, NOC secured a contract to build orbital refueling ports for military satellites and announced accelerated share buybacks.
These developments, along with the endless list of space programs NOC supports, have made the stock ready for launch. This high potential for growth puts Northrop Grumman’s 12-month forecasted best price at $615, up from a $480 average.
Boeing (BA)
Recent troubles with the 737-MAX airliner have yet again cast negativity on Boeing’s (NYSE:BA) stock prospects. Moreover, cost challenges due to inflation continue to cause unease for the king of widebody passenger aircraft. Yet the stars may align for a comeback in Boeing’s position among aerospace stocks in the space industry.
With the announcement of manned testing in April of 2024 of Boeing’s Starliner crew module, the stock’s price has stabilized. The genius behind the Starliner lies in its reusability and quick repair times after missions. This allows for the cheapening of travel and maintenance among Boeing’s commercial space customers like NASA. Boeing’s Space Launch System rocket also remains one of the only U.S. options for heavy lifting in space.
Despite the controversy surrounding newer models of the 737-MAX, Boeing booked new aircraft orders at the end of last year. As such, Boeing remains a critical member of defense and civilian programs, putting the stock at a moderate buy.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.