Why Everyone Is Watching Lockheed Martin (LMT) Today

Lockheed Martin (LMT) is back in focus after a strong quarterly report, a higher full year outlook, and fresh defense wins, including a US$694 million hypersonic missile production contract.

Lockheed Martin’s latest earnings beat, higher full year guidance, and the F-35 framework agreement have been met with a sharp re-rating. The 30 day share price return of 21.55% and the 1 year total shareholder return of 33.11% suggest that momentum has strengthened recently.

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Lockheed Martin’s sharp rerating follows tangible contract wins and stronger reported earnings. However, a 30-day move of more than 20% also hints at changing sentiment. How much of this reset sits in the fundamentals versus the mood of the market?

Most Popular Narrative: 2% Undervalued

On the most followed narrative, Lockheed Martin’s fair value of $645.48 sits only slightly above the last close at $629.75. This puts the spotlight on how reliable that small discount really is, given the reset in expectations.

A record backlog of about US$230b supported by a book to bill ratio of 3.2 to 1 and large multiyear awards such as the seven year US$35b THAAD contract and major radar and space orders points to a multi year period where new work converts into sales, earnings and free cash flow that are not yet fully reflected in reported results.

See why 306 investors see Lockheed Martin as 2% undervalued.

Result: Fair Value of $645.48 (UNDERVALUED)

Still, the bullish Lockheed Martin story can crack if fixed price and legacy programs lead to new cost charges or if U.S. budget decisions slow contract funding.

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

Next Steps

Sentiment around Lockheed Martin is clearly split, with both bright spots and pressure points on display, so consider acting promptly and weigh the evidence yourself. To see the full balance of potential upsides and the issues investors are watching, review the 5 key rewards and 1 important warning sign

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