Key Stats for Lockheed Martin Stock
- Current Price: $556.52
- Target Price (Mid): ~$842
- Street Target (Mean): ~$633
- Potential Total Return: ~51%
- Annualized IRR: ~10% / year
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What Happened?
Lockheed Martin (LMT) closed at $556.52 on August 25. A month earlier, the company posted record backlog, 10.5% revenue growth, and raised every line of its 2026 guidance. Shares ran to about $607 by mid-August, then gave most of it back over the following week with no major company-specific news to explain the slide. Against the unchanged TIKR mid-case target near $842, the stock is now a cheaper entry than it was at $607, and it sits about 20% under its 52-week high of $692.
That poses a real question: is the market pricing a problem the raised guidance hides, or refusing to pay up for a contractor working through a bumpy year? At about 18 times forward earnings, Lockheed carries the lowest multiple of the pure-play primes, below Northrop Grumman near 18.5x, BAE Systems near 23x, and RTX near 28.5x, using TIKR’s NTM P/E figures.
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Whether the Discount Is Deserved Comes Down to Execution
The bear case is about timing: whether orders convert to profit on schedule. First-quarter margins fell on F-16 charges and C-130 pressure. Space later had its full-year profit outlook trimmed on lower ULA equity earnings tied to a Vulcan launch investigation, and management flagged 20 to 30 basis points of near-term margin dilution as the largest munitions programs move through their early, lower-profit phase. A company scaling this fast has more ways to miss on cost than on orders, and the 27.35% drawdown to the June 24 low was the market pricing that.
On the Q2 call, CEO Jim Taiclet detailed a new collaboration with General Motors Defense to apply the automotive industry’s high-rate manufacturing and supply-chain methods to munitions production. The aim, in his words, is to tap “the speed and scale of America’s commercial industrial base to help significantly accelerate output as demand grows.” Paired with moving the ATACMS line into Rheinmetall factory space in Germany, freeing domestic capacity without new buildings, it is a picture of a company attacking the exact cost-and-throughput risk the multiple is punishing.
Missiles and Fire Control grew sales 19% and profit 24% in the quarter, revenue reached $20.06 billion, and free cash flow swung to $2.9 billion from a small deficit a year earlier. Management guided all four segments to grow faster in the second half than in the first. Wall Street is warming too: Citi set a $691 target on August 17, the most bullish major mark on the Street, well above the ~$633 mean, though consensus still clusters near fair value rather than bargain.
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TIKR Advanced Model Analysis
- Current Price: $556.52
- Target Price (Mid): ~$842
- Potential Total Return: ~51%
- Annualized IRR: ~10% / year
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TIKR’s mid-case scenario lands near $842 by the end of 2030, roughly 51% above $556.52, or about 10% a year over the next four-plus years. That sits above both the ~$633 Street mean and Citi’s $691. Because the stock fell after mid-August while the target held, the implied upside is wider now than when shares traded near $607.
- Revenue drivers: the munitions ramp in Missiles and Fire Control, anchored by the PAC-3 and THAAD multiyears through 2030, plus sustained F-35 production and a growing sustainment stream.
- Margin driver: the framework-agreement structure that lets Lockheed keep efficiency gains rather than returning them at the next price review, supporting the model’s roughly 10% net income margin.
- Primary risk: execution. If the early-phase dilution management flagged deepens, or the F-16, C-130, and Space pressures persist, the margin path behind this target does not hold.
The upside is that a company converting a record backlog into accelerating, higher-quality earnings, the market still discounts it below its peers. The downside is a slower grind where demand is real, but profit arrives late, and light, and the discount proves deserved.
Conclusion
If the discount is going to close, the proof is cash. Management raised its 2026 free cash flow outlook to $7 billion to $7.2 billion, and the business generated $2.9 billion in the second quarter alone. A second half that keeps converting near that pace would show the munitions ramp is funding itself rather than draining cash, the single fact most likely to move a skeptical market off an 18x multiple. Lockheed’s next quarterly report, expected in late October, is the checkpoint. Conversion holding up says the market misjudged a scaling business. A shortfall says $556 was right to wait.
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Should You Invest in Lockheed Martin?
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Pull up Lockheed Martin, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
