It may not have the acquisitive President Trump exploding with joy, but shares in U.S. defense group Lockheed Martin (LMT) fired higher today on a new German manufacturing deal.
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Manufacturing Discussions
According to a report in the business magazine WirtschaftsWoche, Lockheed Martin is seeking to have German peer and partner Rheinmetall (RNMBY) manufacture missiles including ATACMS and Hellfire types in Germany. However, the final list of missiles has yet to be determined.
“We are already actively discussing additional manufacturing – including for ATACMS and Hellfire missiles,” Lockheed’s Europe head Dennis Goege told WirtschaftsWoche. He added that it would take place at Rheinmetall’s Unterluess site in northern Germany.
Locked and Loaded
The two companies are already locked and loaded in a partnership which dates back to last year.
In April they said they would expand their cooperation beyond the memorandum of understanding signed in 2024, with the U.S. group providing missile and rocket technology and Rheinmetall manufacturing and selling missiles in Europe.
Rheinmetall has already started making fuselage parts for Lockheed’s F-35 fighter jets.
The move comes as the European members of the NATO alliance, including Germany, have pledged to dramatically ramp up their defense spending in the face of renewed geopolitical threats and pressure from the Trump administration.
It also comes only 24 hours after it was reported that the Trump team was considering taking equity stakes in leading American defense contractors such as Lockheed Martin, RTX Corp (RTX) and Northrop Grumman (NOC).
All three have performed strongly in the last few months as global conflicts continue – see below.
The comments came from U.S. Commerce Secretary Howard Lutnick, who said in a media interview that the government was interested in taking stakes in defense contractors that equip America’s military. The comments come days after the U.S. government acquired a 10% equity stake in chipmaker Intel (INTC)for nearly $9 billion.
Lockheed making deals to boost European manufacturing may please Trump in that it means European governments are actively meeting their defense spending pledges, but it goes against his commitment to increase U.S. manufacturing and jobs.
This has been a central tenet of his tariff trade policies this year.
Is LMT a Good Stock to Buy Now?
On TipRanks, LMT has a Moderate Buy consensus based on 5 Buy, 9 Hold and 1 Sell ratings. Its highest price target is $600. LMT stock’s consensus price target is $475.87, implying a 4.48% upside.
