Analyst Gautam Khanna from TD Cowen maintained a Hold rating on Lockheed Martin and decreased the price target to $420.00 from $480.00.
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Gautam Khanna has given his Hold rating due to a combination of factors impacting Lockheed Martin’s financial outlook. The company faced significant charges in the second quarter, totaling $1.8 billion, which affected several programs. These charges, particularly in the classified aerospace program, were larger than anticipated and have created an operational challenge for the company. Additionally, there is an ongoing tax dispute with the IRS over a $4.6 billion claim related to a past tax accounting change, adding further uncertainty.
Moreover, the company’s free cash flow guidance for 2026 was reduced, partly due to increased pension cash contributions. The F-35 program, a critical component of Lockheed Martin’s operations, also experienced delays in contract finalization, impacting cash flow in the second quarter. Although there is potential for strong foreign demand to offset any domestic shortfall, the overall situation suggests that Lockheed Martin needs to demonstrate operational improvements before a more favorable rating can be considered.
Khanna covers the Industrials sector, focusing on stocks such as Boeing, Booz Allen, and Carpenter Technology. According to TipRanks, Khanna has an average return of 17.8% and a 73.60% success rate on recommended stocks.
In another report released yesterday, Truist Financial also downgraded the stock to a Hold with a $440.00 price target.