Boeing (BA) stock is gaining on Friday after President Donald Trump’s administration picked it over Lockheed Martin (LMT) to build the Next Generation Air Dominance (NGAD) fighter jet.
The multi-decade, $20 billion contract entrusts Boeing with manufacturing the sixth-generation of fighter jets that will replace Lockheed’s F-22 Raptor.
LMT shares are down more than 6% following the announcement from the White House today. Still, there’s reason to see Lockheed Martin as the superior defense stock to buy in 2025.
Why Is LMT a Better Defense Stock Than Boeing?
Lockheed is a pure-play that offers dedicated exposure to the defense sector compared to Boeing, which is primarily associated with commercial aviation.
Plus, LMT shares currently have a forward price-earnings multiple of just over 17 times versus more than 45 times (2026 estimates) for BA. So, Lockheed shares are much more attractive from a valuation perspective.
Additionally, Boeing is still mired in production delays, regulatory scrutiny, and financial losses, which further makes LMT a superior defense stock to own in 2025.
Versus their 52-week high, shares of Lockheed Martin are currently down about 30%.
Lockheed Stock Has Upside to $476 in 2025
Lockheed has a strong presence in military aircraft, missiles, and space systems, which recently made Wells Fargo analyst Matthew Akers raise his price target on LMT to $476.
Akers expects Lockheed stock to benefit as geopolitical tensions continue to make countries spend more on their defense capabilities. His revised price target indicates potential upside of about 10% from current levels.
Unlike Boeing, LMT is a profitable company that reported $527 million in net income for its fourth quarter in January. At the time, Lockheed said its full-year sales will fall between $73.75 billion and $74.75 billion – ahead of the $74.11 billion that analysts had called for.
The defense and aerospace behemoth ended 2024 with a record backlog of $176 billion that further signals continued momentum ahead.
Wall Street Rates Lockheed Martin at Moderate Buy
Investors should also know that the rest of the Wall Street looks even more bullish on LMT shares than Wells Fargo.
The consensus rating on Lockheed stock currently sits at “Moderate Buy” with the mean target of $546 indicating potential upside of about 25% from here. Analysts also rate Boeing as a “Moderate Buy” but its average price target of $201.87 implies just 11% upside potential over the next 12 months.
