Balanced Risk/Reward and Unlocked Optionality Keep Lockheed Martin at Hold

Lockheed Martin, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Sheila Kahyaoglu from Jefferies maintained a Hold rating on the stock and has a $540.00 price target.

Sheila Kahyaoglu has given his Hold rating due to a combination of factors reflecting both near-term uncertainty and longer-term optionality in Lockheed Martin’s story. While the company is poised for revenue growth supported by missile demand, easing comparisons in certain segments, and improving margins as prior charges roll off, guidance for 2026 may come in only modestly above current levels, leaving limited upside to consensus expectations. Additionally, Lockheed’s heavy dependence on programs such as the F-35 and recent cost charges create an overhang, as these issues raise concerns about portfolio concentration and ongoing cash impacts.

At the same time, Kahyaoglu recognizes meaningful catalysts that could unlock value, including potential awards, acceleration in missile and air-defense programs like PAC-3, and possible portfolio actions that could highlight the stronger, faster-growing portions of the business. Her analysis suggests that monetizing higher-growth, higher-margin units at more robust multiples could justify valuation upside, but that these steps remain largely unexecuted and thus speculative at this stage. With the stock trading at a slight premium to its own historical EV/EBITDA multiple but at a discount to the broader market and offering a solid free cash flow yield, the risk/reward appears balanced rather than compelling. Consequently, the current share price already reflects much of the expected fundamental improvement, supporting a Hold rather than a more aggressive rating.

According to TipRanks, Kahyaoglu is a 5-star analyst with an average return of 15.2% and a 65.93% success rate. Kahyaoglu covers the Industrials sector, focusing on stocks such as Boeing, FTAI Aviation, and Delta Air Lines.

In another report released yesterday, Bernstein also maintained a Hold rating on the stock with a $586.00 price target.