NEW YORK (TheStreet) -- Shares of Oshkosh Corp. (OSK - Get Report) are gaining by 5.11% to $40.49 at the start of trading on Wednesday morning, after the aerospace and defense company announced on Tuesday afternoon that it has been awarded a $6.7 billion military contract.
The contact is to build approximately 17,000 new lightweight trucks that will replace older Humvees for the U.S. Army and the Marine Corps.
"Following a rigorous, disciplined JLTV competition, the U.S. Army and Marine Corps are giving our nation's warfighters the world's most capable light vehicle - the Oshkosh JLTV," company CEO Charles Szews said in a statement.
Oshkosh triumphed over competitors including Lockheed Martin (LMT) to build as many as 55,000 Joint Light Tactical Vehicles over the next 25 years, which will replace the Humvee fleet and some larger military trucks, The Wall Street Journal reports.
Oshkosh said it will start delivering vehicles about 10 months after the awarding of the contract.
Separately, TheStreet Ratings team rates OSHKOSH CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OSHKOSH CORP (OSK) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
- OSK, with its decline in revenue, slightly underperformed the industry average of 15.4%. Since the same quarter one year prior, revenues fell by 16.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Machinery industry and the overall market, OSHKOSH CORP's return on equity is below that of both the industry average and the S&P 500.
- OSHKOSH CORP's earnings per share declined by 7.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OSHKOSH CORP increased its bottom line by earning $3.61 versus $3.54 in the prior year. For the next year, the market is expecting a contraction of 14.1% in earnings ($3.10 versus $3.61).
- You can view the full analysis from the report here: OSK Ratings Report