Lockheed Martin (LMT) AI Stock Analysis

• Market Cap: $146.33B
• Dividend Yield: 2.77%
• Average Volume (3M): 1.73M
• Price to Earnings (P/E): 29.6
• Beta (1Y): 0.23
• Revenue Growth: 2.88%
• EPS Growth: -35.15%
• Country: US
• Employees: 121,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 5.80
• Shares Outstanding: 230,080,250
• 10 Day Avg. Volume: 1,859,772
• 30 Day Avg. Volume: 1,725,949
• PEG Ratio: -6.00
• Price to Book (P/B): 16.62
• Price to Sales (P/S): 1.49
• P/FCF Ratio: 16.17
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 1.90
• Enterprise Value/Gross Profit: 18.69
• Enterprise Value/Ebitda: 16.32
• 1Y Price Target: $635.50
• Price Target Upside: 1.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 29.83
• Revenue Forecast (FY): $78.80B

• Rating: 74 Outperform
• Price Target: $697.00 ▲(10.94% Upside)

The score is driven mainly by strong cash-flow durability and a constructive 2026 outlook supported by record backlog and profit guidance. Offsetting factors are recent margin compression and execution-related segment profit volatility, while technically the stock is in a strong uptrend but appears overextended. Valuation is on the higher side relative to the dividend yield, tempering the overall score.

Positive Factors

Free Cash Flow Strength

Consistent, large free cash flow (FCF) underpins durable financial flexibility: it funds elevated CapEx and IRAD, supports production capacity ramps and R&D, and provides the ability to service debt or return capital without relying on equity raises over the medium term.

Backlog and Demand Visibility

A backlog ~2.5x annual sales provides multi-year revenue visibility that smooths demand risk and supports planned ramp-ups. This structural book-to-bill advantage enables more predictable production planning, supply-chain commitments, and long-term capital allocation decisions.

Missiles & Fire Control Momentum

Large framework awards and planned munitions capacity expansion translate to sustained, higher-margin revenue growth in MFC. Tripling PAC-3 output and multiyear agreements create scale, supply-chain investment justification, and durable competitive positioning in a structurally growing segment.

Negative Factors

Margin Compression

A multi-year decline in margins materially reduces operating leverage and free cash flow per dollar of sales. If structural (costs, mix, execution) rather than cyclical, sustained compression will pressure reinvestment capacity and shareholder returns absent enduring efficiency gains or pricing power improvements.

Program Execution and Segment Profit Volatility

Large, program-specific losses and booking-rate adjustments create recurring execution risk across complex, long-cycle defense programs. This volatility can erode margins, require unexpected cash or remedial spend, and complicate forecasting and contract pricing for future programs over multiple years.

Pension Accounting and Future Funding

While the pension buy-out reduces future benefit administration, the accelerated noncash charge and expected ~$1B+ cash contributions restarting in 2027 add recurring cash demands. This creates medium-term cash-flow volatility and reduces incremental capital available for buybacks or discretionary projects.

Lockheed Martin Business Overview & Revenue Model

Company Description

Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. It operates through four segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive missile systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground-based systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. Lockheed Martin Corporation was founded in 1912 and is headquartered in Bethesda, Maryland.

How the Company Makes Money

Lockheed Martin generates revenue through various key streams, primarily driven by government contracts with the U.S. Department of Defense and other international defense agencies. The Aeronautics sector contributes significantly through the production of military aircraft such as the F-35 Lightning II and the C-130 Hercules, while the Missiles and Fire Control sector provides advanced missile systems and defense technologies. Revenue is also bolstered by contracts in the Space sector, which includes satellite systems and space exploration initiatives. Additionally, Lockheed Martin engages in partnerships with other defense contractors, government entities, and international organizations, further enhancing its revenue potential. The company also invests in research and development to innovate and expand its product offerings, which can lead to new contracts and revenue opportunities.

Lockheed Martin Financial Statement Overview

Summary

Strong cash generation is the standout (2025 OCF ~$8.6B; FCF ~$6.9B with solid cash conversion). Revenue has been steady with modest growth, but profitability has weakened with notable margin compression from 2023 to 2025. Balance-sheet risk looks improved in 2025, though prior years showed higher leverage and a thin equity cushion.

Income Statement

Revenue has been steady with modest growth over the last several years, culminating in ~2.3% growth in 2025. Profitability remains solid, but margins compressed notably from 2023 to 2025 (net margin ~10.2% in 2023 to ~6.7% in 2025; similar step-down in gross and operating margins), pointing to higher costs, mix shift, or execution headwinds. Overall, the business still produces healthy operating profit, but the recent margin trajectory is the main blemish.

Balance Sheet

Leverage looks improved in 2025 versus prior years (debt-to-equity down sharply), which strengthens balance sheet flexibility. However, the historical profile shows meaningfully higher leverage in 2022–2024 (debt-to-equity well above 1x and peaking above 3x), indicating the capital structure has not been consistently conservative. Equity remains relatively small versus the asset base, and return on equity is extremely high—positive for efficiency, but also consistent with a thin equity cushion and/or heavy shareholder returns.

Cash Flow

Cash generation is a clear strength: 2025 operating cash flow rose to ~$8.6B and free cash flow jumped to ~$6.9B with strong year-over-year growth. Free cash flow has consistently represented a large portion of earnings (roughly 75–83% across the period), suggesting earnings are backed by cash rather than accounting accruals. The main watch-out is variability in free cash flow growth (down in 2022 and 2024, then sharply up in 2025), which may reflect timing, working capital swings, or program cadence.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	75.06B	71.04B	67.57B	65.98B	67.04B
Gross Profit	7.62B	6.93B	8.48B	8.29B	9.06B
EBITDA	7.75B	8.82B	10.44B	8.71B	9.48B
Net Income	5.02B	5.34B	6.92B	5.73B	6.32B
Balance Sheet
Total Assets	59.84B	55.62B	52.46B	52.88B	50.87B
Cash, Cash Equivalents and Short-Term Investments	4.12B	2.48B	1.44B	2.55B	3.60B
Total Debt	21.70B	21.42B	17.46B	15.55B	11.68B
Total Liabilities	53.12B	49.28B	45.62B	43.61B	39.91B
Stockholders Equity	6.72B	6.33B	6.83B	9.27B	10.96B
Cash Flow
Free Cash Flow	6.91B	5.29B	6.23B	6.13B	7.70B
Operating Cash Flow	8.56B	6.97B	7.92B	7.80B	9.22B
Investing Cash Flow	-1.98B	-1.79B	-1.69B	-1.79B	-1.16B
Financing Cash Flow	-4.94B	-4.14B	-7.33B	-7.07B	-7.62B

Lockheed Martin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 628.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMT, the sentiment is Positive. The current price of 628.26 is above the 20-day moving average (MA) of 578.24, above the 50-day MA of 513.14, and above the 200-day MA of 474.13, indicating a bullish trend. The MACD of 33.67 indicates Negative momentum. The RSI at 76.19 is Negative, neither overbought nor oversold. The STOCH value of 81.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LMT.

Lockheed Martin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHX	75 Outperform	$63.64B	39.89	8.20%	1.61%	2.83%	47.00%
NOC	75 Outperform	$97.22B	23.55	26.17%	1.55%	-0.14%	72.35%
LMT	74 Outperform	$146.33B	29.60	76.87%	2.77%	2.88%	-35.15%
GD	74 Outperform	$93.65B	22.41	17.66%	1.73%	11.86%	17.39%
GE	70 Outperform	$323.78B	37.96	45.24%	0.48%	-19.21%	31.83%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	56 Neutral	$183.00B	122.98	289.00%	―	10.19%	-6.03%

Lockheed Martin Corporate Events

Lockheed Martin Transfers Pension Obligations to Insurers

On December 16, 2025, Lockheed Martin executed buy-out conversions of previously purchased group annuity contracts, transferring approximately $900 million of gross defined benefit pension obligations from its pension plans to certain insurance companies at no additional cost or funding contribution to the company. Following the conversions, the insurers legally assumed responsibility for paying and administering retirement benefits for about 9,000 U.S. retirees and beneficiaries, with no change to the nature, amount, or timing of benefits, while Lockheed Martin expects to record a non-cash, non-operating pretax settlement charge of roughly $480 million in the fourth quarter of 2025, which represents accelerated recognition of actuarial losses and was not included in its prior 2025 financial outlook.

The most recent analyst rating on (LMT) stock is a Hold with a $543.00 price target. To see the full list of analyst forecasts on Lockheed Martin stock, see the LMT Stock Forecast page.

Lockheed Martin Secures New $3 Billion Credit Facility

On December 5, 2025, Lockheed Martin entered into a new 364-Day Revolving Credit Agreement with a $3.0 billion unsecured revolving credit facility involving multiple banks. This agreement, which matures on December 4, 2026, supports the company’s financial flexibility for corporate purposes, including commercial paper borrowings, and reflects its strategic financial management to maintain liquidity and operational stability.

The most recent analyst rating on (LMT) stock is a Sell with a $430.00 price target. To see the full list of analyst forecasts on Lockheed Martin stock, see the LMT Stock Forecast page.