Lockheed Martin (LMT) Could Be 23% Undervalued As $1.2b Missile Deal Lands

Lockheed Martin (LMT) just secured an indefinite delivery, indefinite quantity contract worth up to US$1.2b for Increment 2 of its Precision Strike Missile program, shifting that weapon from the test phase into production.

Despite the PrSM win and other recent defense awards, Lockheed Martin’s share price has slipped 7.85% over the past month and 2.96% over the last week, even though the 1-year total shareholder return of 8.33% and 5-year total shareholder return of 71.66% show that longer term momentum has been positive.

Scan defense beneficiaries moving on similar contract momentum and compare Lockheed Martin with a curated list of 30 resilient stocks with low risk scores.

Lockheed Martin continues to win complex missile and fighter contracts, even as the share price has slipped in recent weeks. That combination of solid contracts and a softer stock raises the next question: Is LMT actually cheap today?

Most Popular Narrative: 23% Undervalued

Lockheed Martin’s most followed narrative pegs fair value at $673.88 per share, compared with the recent close around $519.56. This highlights the question of whether the market is fully accounting for its contract pipeline and cash generation profile.

Orbit keeps getting funded: governments keep spending on space-based warning/tracking because it is now core to missile defense.

Lockheed can “industrialize orbit”: not just building satellites, but building them repeatably, on schedule, at controlled cost (like a production system).

See why 22 investors see Lockheed Martin as 23% undervalued.

Result: Fair Value of $673.88 (UNDERVALUED)

Still, the Lockheed Martin story can break if high capital spending keeps cash flows tight or if complex space programs encounter new delays and cost overruns.

Find out about the key risks to this Lockheed Martin narrative.

Next Steps

If the mixed tone on Lockheed Martin has you undecided, now is a good time to review the full picture and decide where you stand. You can weigh the potential upside against the concerns in the 6 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Lockheed Martin?

If Lockheed Martin is on your radar, do not stop there. Broaden your watchlist with other focused ideas that line up with your risk and income goals.

• Target resilient balance sheets by scanning a curated list of solid balance sheet and fundamentals (24 results) that keeps financial strength front and center.
• Hunt for potential value opportunities and compare pricing power using the focused list of 32 high quality undervalued stocks.
• Build your income stream with a hand picked set of 8 dividend fortresses that aim to keep cash returns in focus.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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