Boeing Nabs $23B US Air Force Contract; First Fighter Jet Order Now In

The U.S. Air Force has awarded Boeing (BA) a nearly $1.2 billion contract to build the first lot of eight F-15EX advanced fighter jets to help the service meet its capacity requirements and add capability to its fighter fleet. The award also covers support and one-time, upfront engineering costs.

Already under construction at the Boeing F-15 production facility in St. Louis, the first two jets deliver next year. Future plans call for as many as 144 aircraft, says Boeing.

This is part of a massive indefinite-delivery/indefinite-quantity contract from the US Air Force with a ceiling value of nearly $23 billion for the F-15EX.

“The F-15EX is the most affordable and immediate way to refresh the capacity and update the capabilities provided by our aging F-15C/D fleets,” Gen. Mike Holmes, Air Combat Command commander, said in a statement. “The F-15EX is ready to fight as soon as it comes off the line.”

Meanwhile Lori Schneider, Boeing F-15EX program manager commented: “The F-15EX is the most advanced version of the F-15 ever built, due in large part to its digital backbone,” adding “Its unmatched range, price and best-in-class payload capacity make the F-15EX an attractive choice for the U.S. Air Force.”

This delivery order provides for design, development, integration, manufacturing, test, verification, certification, delivery, sustainment and modification of F-15EX aircraft, as well as spares, support equipment, training materials, technical data and technical support, according to the announcement.

Work will be performed in St. Louis, Missouri; and at Eglin Air Force Base, Florida, and is expected to be completed Dec. 31, 2023.

Fiscal 2020 research, development, test and evaluation funds in the amount of $248 million; and fiscal 2020 aircraft procurement funds in the amount of $53 million are being obligated at the time of award.

Shares in Boeing are down 45% year-to-date and Wall Street analysts are cautiously optimistic on the stock. Seven Buys, 7 Holds, and 2 Sell ratings give Boeing a Moderate Buy analyst consensus, with the $192 average analyst price target reflecting 9% upside potential in shares over the coming year. (See Boeing stock analysis on TipRanks).

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