Lockheed Martin (LMT) stock moved lower out of the gate Tuesday after the defense and aerospace manufacturer came up short of top- and bottom-line expectations for its fourth quarter and issued a mixed outlook for the full fiscal year.
In the three months ending December 31, Lockheed Martin's revenue decreased 1.3% year over year to $18.6 billion. Its earnings per share (EPS) declined 70.7% from the year-ago period to $2.22, including a $5.45 per share after-tax impact due to classified-programs losses.
Still, Lockheed Martin CEO Jim Taiclet said "2024 was another successful and productive year for" the company. Its "5% sales growth and record year-end backlog of $176 billion demonstrate the enduring global demand for our advanced defense technology and systems," he noted, adding that LMT's "strong and consistent performance also enabled us to again return greater than 100% of free cash flow to our shareholders in 2024."
The results came up short of analysts' expectations. Wall Street was anticipating revenue of $18.8 billion and earnings of $6.61 per share, according to Yahoo Finance.
For 2025, Lockheed Martin said it expects to achieve revenue in the range of $73.75 billion to $74.75 billion and earnings per share of $27 to $27.30. The midpoints of these ranges, revenue of $74.25 billion and earnings of $27.15 per share, are mixed compared with the $74.1 billion in revenue and $27.94 per share in earnings Wall Street is calling for.
Is Lockheed Martin stock a buy, sell or hold?
Lockheed Martin has lagged the broad market over the past 12 months, up 20% on a total return basis (price change plus dividends) vs the S&P 500's 25% gain. But Wall Street remains bullish on the industrial stock.
According to S&P Global Market Intelligence, the average analyst target price for LMT stock is $555.30, representing implied upside of nearly 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Truist Securities is one of the more bullish outfits on the large-cap stock with a Buy rating and $579 price target.
Truist Securities analyst Michael Ciarmoli says LMT's share-price weakness creates a "compelling entry point," and that fears related to potential cost cuts recommended by the Department of Government Efficiency (DOGE) are "overblown" and that "defense spending will continue to rise in coming periods."
He adds that he assumes "LMT management can execute on its 2025 guidance and achieve its multi-year growth framework."
