Lockheed Martin (NYSE:LMT) Stock Jumps 2.2% - Time to Buy?

Key Points

• Lockheed Martin shares rose 2.2% after the company reported quarterly EPS of $7.97, beating estimates, while revenue increased 11.3% year over year to $20.71 billion.
• The company’s record $292 billion backlog and a new 10-year F-35 agreement with the Pentagon strengthen multiyear revenue visibility and defense-demand prospects.
• Analysts hold a “Moderate Buy” consensus with an average price target of $638.05, but investors remain alert to declining margins, cash-generation concerns, possible F-35 contract pressure and profit-taking after the stock’s recent advance.

Shares of Lockheed Martin Corporation (NYSE:LMT - Get Free Report) traded up 2.2% during mid-day trading on Thursday. The company traded as high as $649.00 and last traded at $643.6160. Approximately 1,956,952 shares traded hands during trading, an increase of 34% from the average session volume of 1,464,213 shares. The stock had previously closed at $629.75.

Key Headlines Impacting Lockheed Martin

Here are the key news stories impacting Lockheed Martin this week:

• Positive Sentiment: Lockheed Martin reported quarterly earnings of $7.97 per share, above the $7.52 consensus estimate, while revenue reached $20.71 billion and increased 11.3% year over year. The earnings and revenue beats reinforced confidence in the company’s operating outlook.
• Positive Sentiment: Management disclosed a record $292 billion backlog, providing significant multiyear revenue visibility and making Lockheed Martin a leading beneficiary of sustained U.S. and allied defense demand. Is Lockheed Martin a Buy After Its Latest Earnings Report?
• Positive Sentiment: A 10-year F-35 agreement with the Pentagon was described as one of the largest defense deals in years. The contract improved visibility for the company’s most important program and prompted Morgan Stanley to raise its price target and upgrade the stock to Overweight. Lockheed just landed one of the biggest defense deals in years
• Positive Sentiment: Lockheed Martin’s successful test redirecting an in-flight GMLRS rocket highlighted progress in precision-strike and joint-fires capabilities, supporting its position in advanced missile systems. Lockheed Martin advances joint fires capability
• Neutral Sentiment: Analyst fair-value estimates remain mixed, generally clustering between $600 and $700. Optimists cite the earnings beat, backlog and F-35 progress, while cautious analysts point to cash generation and uncertainty over future U.S. budgets. Lockheed Martin fair value revisions
• Negative Sentiment: The rapid October advance has increased profit-taking risk. Investors are also watching quietly declining margins, potential F-35 contract pressure, negative free cash flow in one quarter and a potentially large pension expense ahead of the next earnings update.

Analysts Set New Price Targets

Several equities analysts have recently commented on LMT shares. Barclays boosted their price objective on Lockheed Martin from $554.00 to $560.00 and gave the company an "equal weight" rating in a research report on Friday, October 23rd. Rothschild & Co Redburn assumed coverage on Lockheed Martin in a research note on Tuesday, October 6th. They issued a "buy" rating and a $650.00 price objective for the company. Robert W. Baird set a $700.00 price target on shares of Lockheed Martin in a report on Friday, July 24th. UBS Group raised their price objective on shares of Lockheed Martin from $653.00 to $692.00 and gave the stock a "buy" rating in a research note on Friday, October 23rd. Finally, Citigroup boosted their target price on Lockheed Martin from $691.00 to $706.00 and gave the company a "buy" rating in a research report on Friday, October 23rd. One research analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, ten have given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $638.05.

Lockheed Martin Stock Performance

The business has a 50-day moving average of $541.77 and a two-hundred day moving average of $567.94. The company has a market cap of $148.68 billion, a P/E ratio of 22.86, a P/E/G ratio of 1.29 and a beta of 0.09. The company has a debt-to-equity ratio of 2.04, a current ratio of 1.26 and a quick ratio of 1.10.

Lockheed Martin (NYSE:LMT - Get Free Report) last posted its earnings results on Thursday, October 22nd. The aerospace company reported $7.97 earnings per share (EPS) for the quarter, beating the consensus estimate of $7.52 by $0.45. Lockheed Martin had a return on equity of 83.41% and a net margin of 8.23%. The company had revenue of $20.71 billion for the quarter, compared to analyst estimates of $20.48 billion. During the same quarter in the previous year, the firm earned $6.95 earnings per share. The firm's quarterly revenue was up 11.3% compared to the same quarter last year. On average, sell-side analysts predict that Lockheed Martin Corporation will post 30.55 EPS for the current fiscal year.

Lockheed Martin Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 31st. Shareholders of record on Tuesday, December 1st will be issued a $3.60 dividend. This is a boost from Lockheed Martin's previous quarterly dividend of $3.45. This represents a $14.40 annualized dividend and a yield of 2.2%. The ex-dividend date of this dividend is Tuesday, December 1st. Lockheed Martin's dividend payout ratio is 49.02%.

Hedge Funds Weigh In On Lockheed Martin

Hedge funds have recently modified their holdings of the stock. IAG Wealth Partners LLC raised its position in Lockheed Martin by 4,800.0% during the first quarter. IAG Wealth Partners LLC now owns 49 shares of the aerospace company's stock valued at $30,000 after acquiring an additional 48 shares in the last quarter. Burnham & Co LLC bought a new stake in Lockheed Martin in the second quarter worth approximately $25,000. Field & Main Bank bought a new stake in Lockheed Martin in the second quarter worth approximately $26,000. Kelleher Financial Advisors bought a new stake in Lockheed Martin in the second quarter worth approximately $29,000. Finally, Highland Investment Advisors LLC acquired a new position in shares of Lockheed Martin during the 2nd quarter worth $29,000. Institutional investors and hedge funds own 74.19% of the company's stock.

About Lockheed Martin

Lockheed Martin Corporation is a global security and aerospace company headquartered in Bethesda, Maryland. Formed in 1995 through the merger of Lockheed Corporation and Martin Marietta, the company develops and produces advanced defense, aerospace, and technology systems for government and commercial customers.

Its principal business areas include Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. Products and services include military aircraft such as the F-35 Lightning II, C-130 Hercules, and F-16 Fighting Falcon; missile-defense and precision-strike systems; helicopters and naval systems; command, control, communications, and intelligence technologies; satellites; space exploration systems; and other classified space and defense programs.

Lockheed Martin serves the U.S.

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