Mercury (MRCY) seizes radar test system from Leonardo UK

Mercury systems MRCY was recently awarded a contract to supply radar test and simulation systems to Rome-based aerospace and defense contractor Leonardo UK. However, the company did not disclose the financial terms of the deal.

Leonardo is an Italian multinational specializing in aerospace, defense and security. The company is among the ten largest defense contractors in the world in terms of turnover and has a significant industrial presence in Italy, the United Kingdom, Poland and the United States.

Under the agreement, Mercury’s radar simulation and test systems will be used to factory test Leonardo’s innovative E-scan radar, which is under development in the UK. The latest agreement follows a previous contract awarded to MRCY in 2019 to design and manufacture advanced processing technology for Leonardo’s E-Scan radar.

Mercury Systems Inc Pricing and Consensus

Mercury Systems Inc price consensus chart | Quote Mercury Systems Inc

Mercury’s radar simulation solutions enable testing and validation of radar systems in a safe and secure laboratory environment, saving customers time and money. The company says the simulator is able to deliver faster and more accurate results, reducing costs and ensuring the safety of aircrew.

Mercury’s continued focus on developing safe and secure test and simulation solutions has positioned it as a preferred choice for aerospace and defense contractors. Last week, the company announced that its rapidly reprogrammable electronic attack (“EA”) training system – mPOD – was undergoing final flight tests.

The mPOD is a jamming training pod designed to train, test and evaluate military pilots for combat in electromagnetic environments. It simulates realistic adversary jamming threats to better prepare US pilots by forming unique strategies to gain an advantage over adversaries. This solution provides integrated threat presentations that significantly reduce training costs for the US Air Force and Navy.

Mercury’s new EA training system can accurately emulate several enemy jamming techniques validated by the National Air and Space Intelligence Center. It comes with Filthy Buzzard digital radio frequency memory technology and requires little to no tuning by engineers or technicians.

Continuous flow of contracts

Mercury has benefited from radar, electronic warfare, and C4I modernization, providing new opportunities in weapons systems, space, avionics processing, mission computing, and robust onboard services. Its expertise in the field of analog and digital integration has enabled it to build a solid business relationship with defense and aerospace prime contractors for a long time.

In June, the company was chosen by ball companyBALL’s wholly-owned subsidiary, Ball Aerospace, to improve the data recording and storage performance of a methane monitoring satellite, MethaneSAT. Incorporating Mercury’s RH3440 3U VPX high-density solid-state data logger, Ball Aerospace’s MethaneSAT spectrometer aims to enable the satellite to collect critical data to address environmental sustainability issues.

In May, the MRCY entered into a multi-year collaboration agreement with Lockheed Martin LMT will develop and manufacture new sensor processing technologies at its Geneva-based facility to meet the critical needs of the aerospace and defense industry.

Through this $40 million contract, Mercury and Lockheed Martin intend to provide Switzerland and other countries with the most advanced airborne defense systems in the world. It should be noted that Mercury’s continued efforts and investments have resulted in successful closing of deals and created approximately $800 million in potential C4I opportunities based on the estimated lifetime value of its top 30 programs.

Zacks ranking and other action to consider

Currently, Mercury sports Zacks Rank #1 (Strong Buy), while Ball and Lockheed Martin each carry Zacks Rank #3 (Hold). Shares of MRCY and LMT are up 11% and 11.2%, respectively, year-to-date (“YTD”). BALL stock fell 26.5% over the same period.

Another title of similar rank worth considering in the wider tech industry is Broadcom AVGO. You can see the full list of today’s Zacks #1 Rank stocks here.

The Zacks consensus estimate for Broadcom’s third-quarter fiscal 2022 earnings has been revised up 9.9% to $9.62 per share in the past 60 days. For fiscal 2022, the Zacks consensus estimate for Broadcom’s earnings has moved north 10 cents to $37.06 per share in the past 30 days.

Broadcom’s earnings have exceeded the Zacks consensus estimate in each of the previous four quarters, with the average surprise being 2.2%. AVGO shares have plunged 23% since the start of the year.

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