The Zacks Analyst Blog Highlights: Boeing, Raytheon, Lockheed Martin, European Aeronautic Defence and Space and Gas Services Group

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Jul 22, 2013, 09:30 ET

CHICAGO, July 22, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Boeing Company (NYSE:BA-Free Report), Raytheon Company (NYSE:RTN-Free Report), Lockheed Martin Corp (NYSE:LMT-Free Report), European Aeronautic Defence and Space Company EADS N.V. (OTC:EADSY-Free Report) and Natural Gas Services Group Inc. (NYSE:NGS-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Boeing Lands More DoD Orders

In a series of contracts worth $340 million that were handed out by the Department of Defense Boeing Company (NYSE:BA-Free Report) received a major share. The company clinched three back-to-back contracts valuing over $100 million.

The biggest was the $75.6 million foreign military sales contract to develop a courseware to offer flight training to the Royal Saudi Air Force to fly a variant of Boeing's F-15 fighter jet, the non-commercial F-15SA. The contract is expected to be concluded by Jul 19, 2019. The tasks relating to the contract will be performed in St. Louis, Mo., and King Khalid Air Base, Khamis Mushayt, Kingdom of Saudi Arabia.

The second was a $17.0 million contract for phase 1 work to assimilate Raytheon Company's (NYSE:RTN-Free Report) new Next Generation Jammer hardware into Boeing's EA-18G Growler electronic warfare aircraft. The project's work is anticipated to continue through Oct 2014.

The final contract worth $8.1 million was for the delivery of 84 AYC 1439 A1 retrofit kits to fulfill the modernization needs of Navy F/A-18 E/F fighter jets. This contract is likely to be finished by Feb 2016.

Boeing has been successful in securing sizeable contracts from the government. Most notable of them was the $1.1 billion contract received by United Launch Alliance, its joint venture with Lockheed Martin Corp (NYSE:LMT-Free Report), for the production of the Evolved Expendable Launch Vehicle.

The company has also performed well in the commercial airspace arena. At the Paris Air Show, Boeing emerged as a clear winner with a lofty 692 airplane orders which will boost the company's future growth trajectory. The defense and aerospace major even outpaced its rival, Airbus, in terms of deliveries made in the first six months of this year.

We believe a steady stream of domestic as well as international orders will ensure future profitability for the company. Boeing currently holds a Zacks Rank #1(Strong Buy).

Apart from Boeing another defense operator with encouraging prospects is Zacks Ranked #2 (Buy) European Aeronautic Defence and Space Company EADS N.V. (OTC:EADSY-Free Report).

Strong Buy on Natural Gas Services

On Jul 18, Zacks Investment Research upgraded Natural Gas Services Group Inc. (NYSE:NGS-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Natural Gas Services is expected release its second quarter earnings results in the next month. Our earnings projection for the quarter is presently pegged at 28 cents, reflecting a projected year-over-year growth rate of 16.7%.

The company is doing well in its core rental business, which contributed 67% to the Natural Gas Services revenue in the first quarter. In addition, the 60-40 breakdown of its assets in dry gas and oil producing areas has added to its advantage. The rental contract received by the company in the first quarter is the highest since 2008.

Positive movements could also be noticed in oil shale installments, which will boost the rental business of the company. Presently about 40% of Natural Gas Services Group's equipment is deployed in oil shales and liquids-oriented plays, up from about 1/3 of the fleet last quarter.

Moreover, the decision to expand its operation in other reserve rich basins has benefited the company and will continue to provide handsome returns going forward.

The present valuation of the company also makes it attractive. The forward price/earnings (P/E) multiple of 20.84x is lower than the peer group average of 22.86x, reflecting a discount of 8.9%. The Return on Equity (ROE) of the company is 7.6%, which is higher than the industry average of 6.5%.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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