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Bethesda, Maryland-based Lockheed Martin Corporation (LMT) is the world's largest defense contractor. It provides defense, space, and security services to the US government, international customers, and commercial clients. With a market cap of $110 billion, it operates through four business segments: Aeronautics, Missiles & Fire Control, Rotary & Missions Systems, and Space Systems. Its products include advanced military aircraft, missile defense systems, combat ships, and space systems.
Companies worth $10 billion or more are considered "large-cap" stocks, and Lockheed Martin fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the aerospace and defense sector. Through its focus on maintaining a monopoly on government defense spending, cultivating strong lobbying and congressional connections, insulating itself from market forces, and developing unrivaled technology, Lockheed Martin has solidified its position as the world's largest military defense contractor.
Shares of Lockheed Martin are currently trading 4.4% below their 52-week high of $479.50, which they hit on Jul. 18 last year. The stock has gained 4.6% over the past three months, slightly underperforming the iShares U.S. Aerospace & Defense ETF’s (ITA) 5.3% returns over the same time frame.
In the long term, Lockheed Martin's stock has underperformed the ITA on a YTD basis, with only marginal gains, while the ITA has gained 5.6%. Additionally, over the past year, the ITA's 15.5% return has surpassed LMT's 1.4% gains.
However, Lockheed Martin has been trading above its 100-day and 200-day moving averages since late March.
Despite macroeconomic headwinds, Lockheed Martin has benefited from increasing global conflicts and the rise in defense spending by nations worldwide. Moreover, on April 23, LMT reported its Q1 earnings, with an EPS of $6.39, beating analyst estimates of $5.81, while revenue of $17.2 billion exceeded analyst expectations of $16 billion. However, following the release of the results, the stock fell marginally, as the market was worried about its further growth scope.
Further, on May 30, LMT, along with the U.S. Department of Defense and state and local officials, marked the inauguration of its new $18 million engineering facility, labs, and demonstration center in Huntsville. The market reacted positively, sending the stock upward for two consecutive trading sessions.
Highlighting the contrast in performance, Lockheed Martin’s competitor, Boeing (BA), has declined 30.7% in 2024 and 18% over the past year, underperforming LMT.
Given its recent underperformance compared to its industry, analysts are cautiously optimistic about Lockheed Martin's prospects. The stock has a consensus rating of "Moderate Buy" from 17 analysts in coverage. The mean price target of $490.24 indicates a 6.9% premium from the current market price.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
