Elbit Continues Growth: Wins Up to $300 Million Contract with US Army

While investors in Israel continue to grapple with uncertainty regarding the potential resumption of fighting with Iran, Elbit Systems is closing another contract in the United States. A joint venture owned by the company, named Collins Elbit Vision Systems (CEVS), has won a contract with a ceiling value of up to $300 million from the US Department of Defense's logistics arm (DLA Aviation).

The contract concerns the supply of spare parts, maintenance, and repair services for JHMCS systems — the advanced helmet-mounted display and targeting systems installed on US and allied fighter jets, such as the F-15, F-16, and F/A-18. The performance period spans up to 78 months, meaning nearly six and a half years.

This specific type of activity, involving maintenance and the supply of spare parts for systems already in service, illustrates an important advantage of Elbit. Unlike one-off arms deals, this is a relatively stable and ongoing revenue stream that does not depend on localized military escalation. As long as the planes are taking off, the equipment wears out and requires maintenance — and the money keeps flowing.

The direct winner is an American joint venture owned 50/50 with Collins Aerospace, so Elbit's economic share is about half of the ceiling. A ceiling value of $300 million, of which Elbit's share is about $150 million spread over years, is certainly respectable and impressive, but for a company with an annual turnover of about $9 billion, it is not considered an exceptional event.

For this reason, the company did not issue a specific report on the win, and contracts of this type are gradually entered into the company's books in accordance with the work orders that the military actually issues throughout the period.

This contract joins an impressive series of deals for Elbit. Just recently, a series of contracts from the US Customs and Border Protection (CBP) totaling more than $370 million was reported, preceded by a tank upgrade deal worth about $350 million.

All this comes after an exceptionally strong first quarter, in which the company recorded revenues of $2.19 billion and a 50% jump in net profit, with the order backlog crossing the $30 billion mark and receiving an impressive Triple A credit rating from S&P.

Elbit CEO Bezalel (Butzi) Machlis, in an interview with ice following the publication of the reports, identified the American engine as a key growth arena. "There are huge opportunities in the US and Europe," he said, explaining that American demand stems, among other things, from "the buildup against China."

He also revealed how deep the technological change in the company is: "There is no Elbit product that does not have AI in it." About 71% of the company's order backlog currently comes from international customers, which illustrates how much Elbit's American leg has become an independent growth engine.

Elbit shares are traded at a market value of about 115 billion shekels after a 34% jump since the beginning of the year and carry a heavy weight in the TA-35 index. This means that almost every pension fund, provident fund, and advanced study fund with exposure to Israeli stocks holds them, even if you have never bought them directly. Any rise or fall in the company's value directly affects the returns of millions of savers.

And yet, it is worth remembering the other side. In the last year, the stock has jumped by about 70%, but in the previous month, it lost about 10.6% against the backdrop of ceasefires that reduced the geopolitical risk premium. The sequence of orders strengthens the business picture and provides an additional revenue base, but the momentum of the stock itself still relies heavily on the level of tension in the region — a reminder that even a "strong" paper carries a significant volatility risk.