LMT
Lockheed Martin Corporation$667.82
Unclear
Target $608.56
Report: Mar 07, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$667.82-8.9%
Rec: UnclearConviction: Medium
Entry Target
$468.12
(30% below current)
Fair Value
$608.56
(9% below current)
Stop Loss
$374.50
(44% below current)
Position Size
Starter
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$692.00
52 Week Low$410.11
Avg. 3 Month Volume1.65M
Efficiency
LTM Gross Margin9.8%
LTM EBITDA Margin11.3%
LTM EBIT Margin9.0%
LTM Operating Margin9.8%
LTM ROA8.0%
LTM ROE74.5%
LTM ROIC16.4%
LTM ROCE18.7%
Capital Structure
Market Cap (MM)$118.4B
Enterprise Value (MM)$137.2B
Shares Outstanding230.56M
Total Debt (MM)$20.70B
Cash & Equivalents (MM)$1.89B
LTM Net Debt (MM)$18.80B
LTM Net Debt/EBITDA2.2x
Growth
TTM Rev. Growth4.6%
Last 3-Yr Rev. CAGR4.3%
Last 3-Yr EBITDA CAGR-0.9%
Last 3-Yr EPS CAGR-1.8%
Valuation
Street Target Price$635.11
LTM EV/Revenue1.8x
LTM EV/Gross Profit18.6x
LTM EV/EBIT20.2x
LTM EV/EBITDA16.2x
LTM P/E24.7x
LTM EV/FCF24.2x
LTM P/FCF20.9x
LTM P/TB2.6x
LTM P/B15.8x
Dividend Yield2.7%
Payout Ratio65.1%
Executive SummarySituation: Current price is $667.82 versus fair value $608.56 (-8.9% expected return), and valuation confidence is stable. Debate: Bull case depends on F-35 Lot 18-19 definitization and sustainment contract awards validate backlog conversion and address spare parts deficits with $1B investment, countering charge fears by proving pricing power in multi-year deals. Bear case centers on Recurring classified program charges ($1.6B in FY2025 Q2) erode margins via fixed-price overruns, impairing ROIC from 21.1% 5Y avg to 17.2%. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Record $194B backlog at 2.6x revenue supports 5% FY2026 growth; F-35 sustainment and PAC-3 ramps yield 10.5% margins with 171% cash conversion; oligopoly ROIC edge (17.2% vs peer 16.75%) compounds via 17% share shrinkage.
Bear Case
$1.6B recurring charges compressed net margin to 6.7%; Debt/Equity 322.9% and negative tangible book expose leverage risks; supply chain vulnerabilities in rare earths from China sanctions threaten F-35 radar production.
Key Catalysts
Near-Term (0-6 months)Impact: High
F-35 Lot 18-19 definitization and sustainment contract awards validate backlog conversion and address spare parts deficits with $1B investme...
Mid-Term (6-18 months)Impact: High
Lockheed Martin's moat sustains high ROIC above 17% through network effects in integrated defense systems, with backlog conversion yielding...
Long-Term (18+ months)Impact: Moderate
Recent $1.6B charges caused -11% drops, but $194B backlog and peer cap cycle signal undervaluation at 24.8x EV/FCF.
Primary Risks
Concern: Medium
Recurring classified program charges ($1.6B in FY2025 Q2) erode margins via fixed-price overruns, impairing ROIC from 21.1% 5Y avg to 17.2%.
Concern: Medium
2.5% growth and 9.5% margins to $5.9B FCFF, 16x terminal defines moat erosion floor at $436/share.
Concern: Medium
Stewardship strong with Lead Director Thomas Falk (KMB TSR outperformance, $9.4B M&A) overseeing returns; no proxy fight, but ESG proposal g...
Recent Activity
2025-07-22SEC Filing (8-K)
-10.81%Lockheed Martin reports Q2 2025 results with significant program losses and other charges impacting earnings.
2025-01-28SEC Filing (8-K)
-9.18%Lockheed Martin reports Q4 2024 earnings with $18.6B sales, $527M net earnings, and $5.45 EPS after $1.7B classified program losses.
2024-10-22SEC Filing (8-K)
-6.15%Lockheed Martin reports Q3 2024 results with 1% sales growth and further raised full-year guidance.
2024-07-23SEC Filing (8-K)
+5.63%Lockheed Martin reports strong Q2 2024 financial results with 9% sales growth and raised full-year outlook.
2022-10-18SEC Filing (8-K)
+8.69%Lockheed Martin reports Q3 2022 earnings with $16.6B sales, $1.8B net earnings, and $6.71 EPS.
Valuation Table
9.8/10Decision Grade
Scenario Range
$436
Bear
$616
Base
$745
Bull
$668