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Lockheed Martin (LMT)
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Lockheed Martin (LMT) AI Stock Analysis

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LMT

Lockheed Martin

(NYSE:LMT)

Rating:64Neutral
Price Target:
$448.00
▲(6.37%Upside)
Lockheed Martin's overall stock score reflects stable financial performance and strong dividend yield, offset by bearish technical indicators and valuation concerns. Mixed earnings call sentiment suggests potential future growth, but current financial challenges require careful consideration.
Positive Factors
Cash Flow
The Lot 18/19 F-35 contract is expected to be finalized soon, which should improve cash flow.
Foreign Demand
Foreign demand for the F-35 may help compensate for any potential decline in U.S. Department of Defense orders.
Valuation
The valuation for Lockheed Martin, the largest US Defense pureplay, has become too cheap to ignore at a time when global budgets are accelerating.
Negative Factors
Financial Performance
Heavy charges across many programs have negatively impacted the company's financial performance.
Operational Concerns
The magnitude of charges related to the classified aero program was much larger than expected, raising concerns about its operational success.
Tax Uncertainty
The IRS believes Lockheed Martin owes a significant amount in taxes, which creates uncertainty.

Lockheed Martin (LMT) vs. SPDR S&P 500 ETF (SPY)

Lockheed Martin Business Overview & Revenue Model

Company DescriptionLockheed Martin Corporation (LMT) is a global aerospace, defense, security, and advanced technologies company headquartered in Bethesda, Maryland. The company operates through four main business segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. Lockheed Martin's core products and services include military and civilian aircraft, missile defense systems, cyber security solutions, and space exploration technologies.
How the Company Makes MoneyLockheed Martin makes money primarily through contracts with the U.S. government and foreign governments for defense and aerospace products and services. The company's revenue model is heavily reliant on its Aeronautics segment, which includes the design and production of military aircraft like the F-35 Lightning II and C-130 Hercules. The Missiles and Fire Control segment generates revenue from missile defense systems and precision weapons. The Rotary and Mission Systems segment provides maritime systems, radar technologies, and cyber security solutions. Finally, the Space segment focuses on satellite systems, space exploration, and strategic missile programs. Significant partnerships with government agencies, long-term contracts, and a diverse portfolio of advanced technology products contribute to Lockheed Martin's earnings.

Lockheed Martin Key Performance Indicators (KPIs)

Any
Any
Total Aircraft Deliveries
Total Aircraft Deliveries
Tracks the number of aircraft delivered, reflecting production efficiency and fulfillment of customer demand in the aerospace sector.
Chart InsightsLockheed Martin's aircraft deliveries show a significant recovery in late 2024, with a peak in Q4, reflecting robust demand and operational improvements. Despite a dip in early 2024, the resurgence aligns with strong international demand for the F-35, as noted in the earnings call. The company's strategic focus on technological advancements and significant contract wins bolster its competitive edge, even as it navigates challenges like the NGAD program decision and tariff impacts. This momentum supports the company's confidence in achieving mid-single-digit sales growth and enhancing shareholder value.
Data provided by:Main Street Data

Lockheed Martin Earnings Call Summary

Earnings Call Date:Jul 22, 2025
(Q2-2025)
|
% Change Since: -8.55%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed sentiment with strong operational success and international demand offset by significant financial charges and tax disputes. The company highlights robust growth in certain segments and future contract opportunities, but faces challenges in legacy programs and cash flow management.
Q2-2025 Updates
Positive Updates
Strong Performance in Combat Operations
Lockheed Martin systems, including the F-35 and F-22, demonstrated high effectiveness in recent US military operations in the Middle East. The PAC-3 missiles successfully intercepted threats, highlighting the reliability of Lockheed Martin's air and missile defense portfolio.
Investment in Infrastructure and Innovation
The company invested $800 million in infrastructure and innovation for growth, reflecting a commitment to future advancements.
International Demand for F-35
Strong international demand continues for F-35s, with the UK planning to procure 12 F-35A's and Belgium adding 11 aircraft to their fleet.
Growth in Space and Missile Programs
Space sales increased by 4% year-over-year, driven by higher volumes in commercial civil space and strategic missile defense programs.
Expansion of Hypersonics Program
The US president's fiscal year 2026 budget requests $400 million for the Air Launched Rapid Response Weapon, Lockheed Martin's first proven hypersonic weapon capable of being launched from an American aircraft.
Negative Updates
Significant Financial Charges
Lockheed Martin recognized $1.8 billion in losses across several legacy programs, primarily due to challenges in classified aeronautics programs and Sikorsky's helicopter programs.
IRS Tax Dispute
The IRS asserts that Lockheed Martin owes $4.6 billion in additional income tax related to a tax accounting method change, impacting their financial outlook.
Classified Program Challenges
Additional reach-for-loss charges of $950 million were recognized due to design and integration challenges on a classified program in aeronautics.
Decline in RMS Sales
Sales at Rotary and Mission Systems declined by 12% due to losses related to the Canadian Maritime Helicopter Program and Turkish Utility Helicopter Program.
Cash Flow Challenges
The delay of the F-35 lot 18/19 award and high receivables balance affected cash flow, contributing to a usage of $150 million in free cash flow for the second quarter.
Company Guidance
In the second quarter of 2025, Lockheed Martin reported $18.2 billion in sales, comparable to the previous year, with a sequential increase from the first quarter. Despite recognizing losses of $1.8 billion due to various legacy programs, including $950 million from a classified program and significant charges from Sikorsky programs, the company maintained a strong cash flow outlook, projecting $6.6 to $6.8 billion for the year. The F-35 program delivered 50 aircraft in the quarter, with 97 delivered year-to-date, and international demand remains robust, with countries like the UK and Belgium planning additional purchases. The company is also anticipating significant awards in the second half of the year, including those for the F-35, JASSM LARASM, PAC-3 production, and CH-53K, which could lead to a record backlog by year-end. Despite challenges, Lockheed Martin emphasized its readiness to support national defense priorities and its commitment to shareholder returns, having returned $1.3 billion to shareholders this quarter.

Lockheed Martin Financial Statement Overview

Summary
Lockheed Martin has shown stable financial health with consistent revenue growth and strong operational efficiency. However, challenges in profitability margins and a decline in free cash flow generation highlight areas needing improvement. The company has successfully reduced leverage and improved its balance sheet strength.
Income Statement
78
Positive
Lockheed Martin's income statement shows a stable revenue growth trajectory with a TTM (Trailing-Twelve-Months) revenue of $71.8 billion, up from $71.0 billion in 2024. The gross profit margin has slightly decreased to 8.16% from 9.75% in 2024, indicating potential cost challenges. The net profit margin also declined to 5.85% from 7.51%, reflecting reduced profitability. However, EBITDA margin remains strong at 11.21%, showcasing operational efficiency.
Balance Sheet
72
Positive
The balance sheet indicates a robust equity position with a debt-to-equity ratio improvement to 0.58 from 3.20 in 2024, highlighting reduced leverage. The equity ratio stands at 9.06%, reflecting a manageable level of equity in total assets. However, the ROE has decreased to 78.81% from 84.26%, indicating a slight dip in shareholder returns. Overall, the company maintains a stable financial position with adequate equity and reduced debt levels.
Cash Flow
75
Positive
Cash flow analysis reveals a decrease in free cash flow to $3.33 billion from $5.29 billion in 2024, indicating a reduction in liquidity generation. The operating cash flow to net income ratio is healthy at 1.21, suggesting efficient cash generation from operations. The free cash flow to net income ratio has decreased to 0.79, reflecting reduced cash retention. Overall, the cash flow statement shows stable operational cash flows but highlights a decline in free cash flow generation.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue71.04B67.57B65.98B67.04B65.40B
Gross Profit6.93B8.48B8.29B9.06B8.65B
EBITDA8.82B10.44B8.71B9.48B10.12B
Net Income5.34B6.92B5.73B6.32B6.83B
Balance Sheet
Total Assets55.62B52.46B52.88B50.87B50.71B
Cash, Cash Equivalents and Short-Term Investments2.48B1.44B2.55B3.60B3.16B
Total Debt20.27B17.46B15.55B11.68B12.17B
Total Liabilities49.28B45.62B43.61B39.91B44.67B
Stockholders Equity6.33B6.83B9.27B10.96B6.01B
Cash Flow
Free Cash Flow5.29B6.23B6.13B7.70B6.42B
Operating Cash Flow6.97B7.92B7.80B9.22B8.18B
Investing Cash Flow-1.79B-1.69B-1.79B-1.16B-2.01B
Financing Cash Flow-4.14B-7.33B-7.07B-7.62B-4.53B

Lockheed Martin Technical Analysis

Technical Analysis Sentiment
Negative
Last Price421.17
Price Trends
50DMA
464.63
Negative
100DMA
461.78
Negative
200DMA
481.30
Negative
Market Momentum
MACD
-11.00
Positive
RSI
30.86
Neutral
STOCH
15.90
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMT, the sentiment is Negative. The current price of 421.17 is below the 20-day moving average (MA) of 456.02, below the 50-day MA of 464.63, and below the 200-day MA of 481.30, indicating a bearish trend. The MACD of -11.00 indicates Positive momentum. The RSI at 30.86 is Neutral, neither overbought nor oversold. The STOCH value of 15.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LMT.

Lockheed Martin Risk Analysis

Lockheed Martin disclosed 21 risk factors in its most recent earnings report. Lockheed Martin reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lockheed Martin Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$51.08B30.108.90%1.73%2.93%43.29%
76
Outperform
$84.53B21.2817.91%1.86%11.85%16.12%
76
Outperform
$207.77B34.3810.13%1.64%15.44%164.00%
71
Outperform
$81.40B20.9026.50%1.49%-0.65%77.20%
67
Neutral
£2.85B10.424.69%215.06%2.73%-20.56%
64
Neutral
$98.18B23.6173.06%3.10%1.09%-35.50%
59
Neutral
$174.38B-162.23%-9.15%-406.76%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LMT
Lockheed Martin
421.17
-90.14
-17.63%
BA
Boeing
233.06
46.17
24.70%
GD
General Dynamics
314.02
29.58
10.40%
LHX
L3Harris Technologies
269.28
44.44
19.77%
NOC
Northrop Grumman
569.74
97.73
20.71%
RTX
Raytheon Technologies
156.88
45.27
40.56%

Lockheed Martin Corporate Events

Executive/Board ChangesShareholder Meetings
Lockheed Martin Holds Annual Stockholders Meeting
Neutral
May 9, 2025

On May 9, 2025, Lockheed Martin held its Annual Meeting of Stockholders, where a significant 86.47% quorum was achieved. Key outcomes included the election of 10 directors to the board, approval of executive compensation, and ratification of Ernst & Young LLP as independent auditors. However, stockholder proposals regarding excessive golden parachutes and political activities alignment with human rights policy were not approved.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 24, 2025