An analyst from Truist, Michael Ciarmoli, has adjusted his outlook on Lockheed Martin (LMT, Financial), reducing the stock's price target from $579 to $554 while maintaining a positive "Buy" recommendation. This revision is part of a broader analysis of the Aerospace and Defense sector before the release of second-quarter financial results. Despite potential challenges from tariffs, the analyst believes these obstacles will be manageable for both commercial aerospace and defense segments. Small to mid-cap defense and space companies are currently enjoying a valuation premium of 122% compared to their larger counterparts. Additionally, the global defense spending environment remains favorable, and the commercial aerospace aftermarket is predicted to maintain its strength. Suppliers involved in original equipment manufacturing, particularly those associated with higher MAX/LEAP production rates, are positioned to benefit from these trends.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Lockheed Martin Corp (LMT, Financial) is $530.50 with a high estimate of $670.00 and a low estimate of $408.00. The average target implies an upside of 14.26% from the current price of $464.31. More detailed estimate data can be found on the Lockheed Martin Corp (LMT) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, Lockheed Martin Corp's (LMT, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lockheed Martin Corp (LMT, Financial) in one year is $562.33, suggesting a upside of 21.11% from the current price of $464.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lockheed Martin Corp (LMT) Summary page.
LMT Key Business Developments
Release Date: April 22, 2025
- Sales Growth: 4% year-over-year increase in sales for Q1 2025.
- Segment Operating Margin: 11.6% with all business areas generating double-digit returns.
- GAAP Earnings Per Share: $7.28, a 14% increase year-over-year.
- Backlog: Approximately $173 billion.
- Free Cash Flow: $955 million generated in Q1 2025.
- Shareholder Returns: $1.5 billion returned through dividends and share repurchases.
- Aeronautics Sales: $7.1 billion, a 3% increase year-over-year.
- Missiles and Fire Control Sales: 13% increase driven by tactical and strike missile programs.
- Rotary and Mission Systems Sales: 6% increase to $4.3 billion.
- Space Sales: 2% decrease year-over-year.
- Investment in R&D and CapEx: Nearly $850 million in Q1 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lockheed Martin Corp (LMT, Financial) reported a 4% year-over-year increase in sales for the first quarter of 2025, demonstrating continued growth momentum.
- The company generated $955 million in free cash flow, after investing $850 million in R&D and capital expenditures.
- Lockheed Martin Corp (LMT) returned $1.5 billion to shareholders through dividends and share repurchases during the quarter.
- The company secured several large missile program awards, including contracts for precision strike missiles, THAAD, and joint air-to-surface standoff missiles, totaling up to $10 billion in future work.
- Lockheed Martin Corp (LMT) maintained a strong backlog of approximately $173 billion, providing a solid foundation for sustained growth.
Negative Points
- The book-to-bill ratio was less than 1 in the quarter, indicating that new orders did not keep pace with sales.
- Lockheed Martin Corp (LMT) faces potential impacts from tariffs and the NGAD program decision, although the company is confident in mitigating these effects.
- Space sales decreased by 2% year-over-year due to lower volume at National Security Space, primarily related to the overhead persistent infrared radar program.
- The company is navigating a dynamic tariff environment, which could lead to timing issues in cost recovery.
- Lockheed Martin Corp (LMT) did not win the NGAD contract, and while they are not protesting the decision, it could impact future growth opportunities.
