While U.S. financial markets have been volatile this year amid constant tariff threats, Wall Street just suffered its worst two-day rout in years. The S&P 500 Index ($SPX) sank 4.8% on April 3, its worst single-day drop since the COVID crash, only to plunge even deeper on April 4. In just two trading sessions, a staggering $6.6 trillion in market value vanished into thin air. And the index has now cratered more than 18% from its recent peak, firmly planting itself deep in correction territory.
This dramatic selloff was sparked by President Donald Trump’s “Liberation Day” tariff bomb revealed on April 2, which sent shockwaves through global markets and rattled investor confidence. But even amid this chaos, one corner of the market is showing signs of resilience. Defense giants like Lockheed Martin (LMT) remain somewhat stable while traditional manufacturing heavyweights stumble under the weight of tariff fears. With a business model rooted in domestic production and government contracts, Lockheed appears to be largely shielded from the turbulence of international trade tensions.
About Lockheed Martin Stock
Lockheed Martin Corporation (LMT) has cemented its place as one of the world’s leading defense contractors. As a global aerospace and security powerhouse, it draws the bulk of its business from the U.S. Department of Defense and related federal agencies.
With a market cap of $101 billion, the company thrives on long-term government contracts that provide stability through economic storms. So far this year, shares of this defense contractor have crashed almost 9% but LMT is still faring better than the broader market’s 15.3% year-to-date plunge.
For income investors looking for reliability amid market volatility, Lockheed Martin might be a good bet. With an impressive 22-year streak of consecutive dividend hikes, the defense giant continues to prove its commitment to shareholder returns. Plus, in 2024 alone, Lockheed handed back $6.8 billion through dividends and share repurchases. Most recently, on March 28, the company distributed its shareholders a quarterly dividend of $3.30 per share.
On an annualized basis, it dishes out a dividend of $13.20 per share, offering an appealing 3% yield. Beyond its commitment to reward investors, Lockheed also brings compelling value to the table. Presently, the stock is trading at 15.9 times forward earnings, which is more affordable than the sector median of 16.31x and its own five-year average of 16.3x.
Lockheed Martin Misses on Q4 Earnings
Lockheed Martin’s fourth-quarter earnings, released on Jan. 28, painted a mixed picture that rattled some investors, triggering a 9.2% drop in its shares on the same day. Net sales dipped 1.3% year over year to $18.6 billion, coming in below Wall Street’s expectations. Plus, Lockheed Martin’s GAAP earnings came in at just $2.22 per share, falling well short of the Street’s $6.62 estimate and marking a steep 70.7% decline from the prior year.
The sharp drop highlighted mounting challenges tied to its classified programs, which weighed heavily on the quarter’s performance. Pre-tax losses totaling $1.7 billion in the Aeronautics and Missiles and Fire Control segments significantly dented Lockheed Martin’s operating profits, driving earnings per share far below expectations.
On the financial front, the defense giant saw its free cash flow tumble to $441 million in the quarter, down sharply from nearly $1.7 billion a year ago, pressured by hefty pension contributions. Yet, beneath the turbulence, the company locked in a record $176 billion backlog by the end of 2024, a powerful signal of enduring demand and long-term stability.
Looking forward to 2025, management projects net sales to range between $73.75 billion and $74.75 billion, while EPS is forecast to range between $27 and $27.30. Plus, free cash flow for the entire year is predicted to land between $6.60 billion and $6.80 billion.
What Do Analysts Expect for Lockheed Martin Stock?
Despite the company’s less-than-stellar fourth-quarter earnings release, Wall Street appears optimistic about LMT stock, maintaining a “Moderate Buy” rating overall. Of the 22 analysts offering recommendations, nine advocate a “Strong Buy,” 12 give a “Hold,” and the remaining one suggests a “Strong Sell.” The average price target of $525.73 represents potential upside of 18.5%, while the Street-high target of $670 suggests an almost 52% rally from current levels.
