Lockheed Martin dropped ~10% after Q2 earnings, mainly due to several large charges tied to classified and international programs. This hit GAAP earnings hard, forced a cut to full-year EPS guidance, and even led to negative free cash flow for the quarter.

That said, adjusted EPS actually beat expectations, revenue guidance was reaffirmed, and the company still has a $166B+ backlog. Demand for defense remains strong, and their core programs like the F-35 and missile systems are still solid.

Is the selloff just a reaction to one rough quarter, or does it point to deeper execution issues? Does the long-term story still hold up here?

Curious to hear what your opinion is. Buying opportunity or stay away?

I bought some in October and it has been falling/stalking ever since. Is something going wrong in their projects?

What are your thoughts on Lockheed Martin following this dip? Do you believe this presents a good entry point, or is the company no longer what it once was?

Lockheed Martin (LMT) shares tumbled Tuesday as the defense contractor missed revenue estimates on a drop in aerospace sales.

The company reported third-quarter revenue rose 1% year-over-year to $17.10 billion, while analysts surveyed by Visible Alpha were looking for $17.38 billion. Earnings per share (EPS) of $6.80 exceeded forecasts.

Lockheed's Aeronautics unit sales declined 3% to $6.49 billion, primarily because of delays in contractual authorization and funding for the F-35 fighter jet. Sales at its Space division were down less than 1% to $3.08 billion. Missiles and Fire Control segment revenue jumped 8% to $3.18 billion, and Rotary and Mission Systems unit revenue was 6% higher at $4.37 billion.

The company raised its full-year EPS outlook to $26.65 from a range of $26.10 to $26.60, and narrowed its revenue outlook to $71.25 billion from the previous $70.50 billion to $71.50 billion.

Shares of Lockheed Martin hit an all-time high yesterday, and even with today's roughly 5% declines they're up nearly 30% year-to-date.

https://www.investopedia.com/lockheed-martin-stock-sinks-as-f-35-sales-decline-weighs-on-revenue-8732059

For whatever reason I can't post images but shares dumped heavily on earnings due to a classified project cutting into earnings. It's safe to say defense is one area where Trump admin has no interest in cutting and will continue to award whatever contracts it can to LMT, but real issues to growth lie in the following:

Lockheed mentioned elevated expenses on fixed-price contracts, numerous entered into prior to the post-pandemic rise in labour and materials costs. The company added inflation and a persistent lack of supply chain availability is straining long-term defense systems.

Is this a defense stock that can turn it around and go the way of RTX or something that can freefall for a while?

LMT has gotten hammered over the past couple months because of news the company is gonna miss slightly on F-35 deliveries. Selling for a reasonable valuation of 14 times for a secular company that isn't gonna be growing at a high rate but whose clients are extremely dependable. Decent share buyback and 3% dividend that eats up less than half FCF. Not much debt. From a technical aspect, seems to be hitting a 4-year support level at 395. Does this seem like a good time to open a long position? Thank you

Hey r/investing,

With some recent developments in the defense sector, I think it’s worth taking a closer look at Lockheed Martin (LMT). Here’s why:

1. New Contracts: LMT just bagged a $175M contract for the F-35 Fighter Aircraft, showcasing its ongoing dominance in the aerospace sector. This is on top of a massive $443M contract for the Black Hawk helicopter. These contracts not only boost revenue but also reaffirm Lockheed’s position as a top defense contractor. If this all wasn’t enough, the House and Senate have just approved a $886.3 billion defense policy bill, and Lockheed Martin, being a leading defense contractor, often benefits from increased defense spending.

2. Stable Revenue Stream: Lockheed’s consistent government contracts, especially from the U.S. Department of Defense, provide a stable and predictable revenue stream. In an uncertain economic climate, this stability is gold.

3. Innovation Leader: LMT is at the forefront of defense technology. From advanced fighter jets to cutting-edge missile systems, their focus on R&D means they’re ahead of the curve.

4. Dividend Payouts: Lockheed’s history of paying dividends is attractive. They’ve been known to increase their dividend payouts.

5. Global Security Demand: With rising global security challenges, the demand for defense equipment isn’t going down anytime soon. Lockheed, with its diverse range of defense products, is well-positioned to meet this demand.

6. Economic Resilience: Defense stocks like LMT tend to be more resilient to economic downturns. Defense spending often remains stable or even increases, regardless of the economic climate.

However, it’s not all sunshine and rainbows. There are risks, like dependency on government policies and global political dynamics. But overall, LMT’s recent contract wins and its strong position in the defense sector make it a stock worth considering.

What do you all think? Is LMT a good long-term play, or are there better options out there in the defense sector?

Disclaimer: This is not financial advice. Always do your own research before investing.

Edit: grammar

With conflicts in Ukraine, Gaza, and rising global defense budgets, Lockheed Martin is getting serious attention again. But has the “war trade” already played out?

Quick Facts:

• Maker of F-35s, Javelins, HIMARS — all in high demand.

• U.S. defense budget heading toward $895B.

• Major NATO countries increasing spending.

• Fundamentals: Solid balance sheet, ~2.6% dividend yield, low P/E (~16.5).

Bullish View:

• Long-term gov contracts = stable revenue.

• Global rearmament = multi-year tailwind.

• Attractive dividend + buybacks.

Risks:

• If tensions cool, LMT might lose momentum.

• Program delays + political shifts can hurt growth.

• Already near technical highs (watch for pullbacks).

My Take:
LMT is like a hedge on global chaos — stable, high-margin, and backed by governments. I’m watching for dips near $450 and scaling in slowly. This isn't hype; it’s long-term macro positioning.

I also write a newsletter breaking down these types of opportunities. If you want deeper dives like this each week, check it out here:

https://wealth-whispers.beehiiv.com/subscribe

I saw yesterday that Biden was talking about the need to help israel and Ukraine, and even calling for something like 100 billion from Congress. He even mentioned missle manufacturing in Tucson which is where Raytheon is headquartered I believe. I thought this would make Lockheed shoot up . Looking for some insights

LMT has always been on my radar, but with the recent price dip ($350), it seems to have some good characteristics.

Dividend is about 3% with payout ratio less than 40%. They have also been consistently buying back shares.

I did my own DCF calc and came up with an intrinsic value of $414. Analyst average price target is $430.

Operating margins are consistently improving and ROIC is excellent.

The elephant in the room is the US defense budget going forward. It’s been consistently increasing for quite a while, but they’d obviously be in trouble if it were cut.

That’s what I’ve found so far. I’d appreciate input from others.

It appears that either China or the aliens are invading the US. Either one of these situations would cause the US to bolster their military and purchase more equipment. Lockheed Martin is the biggest defense contractor for the government, so would this be a wise place to invest?

The war in Ukraine as also depleted much of our weapon arsenal, so it seems likely the US will increase their purchases of military equipment.

Hello community,

For the past few weeks, I have been studying Lockheed Martin as a potential investment. The main reason is that the valuation seems to be relatively modest (PE ~16x), despite all of the following:

- Great fundamentals (high Return on Capital, high turnover and margins, high but sustainable debt),

- A good shareholder remuneration with growing dividends and decreasing share count,

- Significant barriers to entry due to proprietary technology, intangible assets, switching costs from its products, huge capital investments required to enter the business,

I have gathered my thoughts in the following post:

Lockheed Martin - Analysis

I find that writing helps a lot organising ideas. However, I am not an expert in the field and have only spent a good chunk of hours (but not months, nor years) studying the business.

For this reason, I would appreciate your point of view and possibly identify any flaws in my analysis that could prevent me from doing a mistake.

Thank you very much!

So, what are your moves?

Article (also includes commentary on Raytheon, GD, etc.): https://www.investors.com/news/defense-stocks-q3-earnings-lockheed-raytheon-northrop-earnings-due/

Pertinent LMT text:

LMT Stock Tumbles After Revenue Miss

Estimates: FactSet analysts saw Lockheed earnings falling 68.5% to $1.97 per share. But revenue is seen edging up 3.8% to $17.1 billion.

Results: Lockheed earnings fell to $2.21 on revenue of $16.03 billion.

Aeronautics segment sales fell 2% to $6.57 billion on lower net sales in the F-35 program.

Lockheed Martin's biggest moneymaker is its F-35 fighter jet. But in recent quarters its missiles and fire control unit has been its fastest-growing segment. However, that segment saw its revenue fall by 6% to $2.78 billion.

Revenue at the space unit fell 5% to $2.7 billion. Lockheed said the drop in sales was partially offset by its hypersonic weapons development.

The company is developing hypersonic weapons and opened a new factory in Alabama for hypersonic missile production earlier this month. Unlike ballistic missiles, which fly in a predictable arc, hypersonic weapons fly five times the speed of sound — or Mach 5 — in unpredictable flight paths, making them difficult to defend against.

Outlook: Lockheed sees full-year sales of $67 billion, down from a previous outlook of $67.3 billion to $68.7 billion.

Stock: Shares tumbled 7.6% to 347.60 on the stock market today. LMT stock is running up the right side of a consolidation with a 397.09 entry point, according to MarketSmith analysis.