The stock of defense contractor Lockheed Martin (LMT) closed 1% higher on an otherwise down day for markets after U.S. President Donald Trump said he will allow F-35 fighter jet sales to Saudi Arabia.
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“I will say that we will be doing that,” Trump told reporters assembled at the White House on Nov. 17, referring to sales of the stealth fighter jets to Saudi Arabia. The announcement comes ahead of Saudi Crown Prince Mohammed bin Salman’s scheduled visit to the White House on Nov. 18.
Lockheed Martin is the leading manufacturer of the F-35 aircraft, which is widely considered to be the most advanced fighter jet in the world. Several other countries have committed to buying the F-35 aircraft, including Australia, Canada, Israel, Japan, and the United Kingdom (U.K.).
Concession
The sale of F-35s represents a major concession to Saudi Arabia as Washington and Riyadh look to deepen their political, economic and military ties. Trump is also reportedly pressing Saudi Arabia to normalize relations with Israel in the aftermath of the conflict in Gaza.
The F-35 is the world’s most advanced fighter jet and Saudi Arabia has long coveted them. Each aircraft manufactured by Lockheed Martin costs about $100 million to purchase. Trump has also offered to sell as many as 50 F-35 aircraft to the United Arab Emirates (UAE). But that deal has stalled over restrictions the U.S. government wants to place on the fighter jets.
Is LMT Stock a Buy?
The stock of Lockheed Martin has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on five Buy and seven Hold recommendations issued in the last three months. The average LMT price target of $537.82 implies 14.24% upside from current levels.
