Tag: LMT

Lockheed Martin (NYSE: LMT) recently reported its Q4 2024 results, with revenues missing and earnings ahead of the street estimates. The company reported revenue of $18.6 billion and adjusted earnings of $7.58 per share, compared to the consensus estimates of $18.8 billion and $6.62, respectively. The bottom line was weighed down by a $1.7 billion pre-tax loss for classified programs at its aeronautics and missiles, and fire control business segments. The company’s outlook for 2025 was also below expectations, and LMT stock plunged 8% post the results announcement. Separately, What’s Next For Boeing Stock After An Optimistic Production Outlook?

LMT stock, with 4% returns since the beginning of 2024, has underperformed the S&P 500 index, up 27%. A delay in the F-35 fighter jet lots 18-19 aircraft contract has weighed on the company’s stock price lately. But, if you want upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

How Did Lockheed Martin Fare In Q4?

Lockheed Martin’s revenues of $18.6 billion reflected a 1.3% y-o-y decline.

Looking at segments, the Missiles and Fire Control segment saw an 8% sales growth, while Aeronautics sales were up 5%. But, this was more than offset by a 10% decline in Rotary & Mission Systems sales, and the Space segment seeing a 13% revenue decline. Aeronautics sales trended higher amid higher volume on F-35 production contract. MFC sales growth was led by a production ramp up for missile programs, including Long Range Anti-Ship Missile and Guided Multiple Launch Rocket Systems programs. RMS sales were weighed down by lower production volume on the Seahawk program and the Combat Rescue Helicopter program. Sales for Sikorsky helicopters were also down. Lastly, lower volume for the company’s Next-Generation Overhead Persistent Infrared program weighed on the Space segment sales.

Lockheed Martin reported a 850 bps fall in operating margin to 2.3% in Q4, due to a $1.7 billion loss related to classified programs. This resulted in the bottom line of $2.22, reflecting a 71% y-o-y decline. However, on an adjusted basis, the earnings stood at $7.67. Looking forward, the company expects its 2025 sales to be $74.25 billion and earnings to be $27.15 at the mid-point of the provided range. This is well below the consensus estimate of $27.85.

What Does This Mean For LMT Stock?

Lockheed Martin posted a mixed Q4 and a downbeat outlook for 2025. This weighed on its stock post the results announcement. Even if we look at a slightly longer period, the increase in LMT stock over the last four-year period has been far from consistent and has largely been as volatile as the S&P 500. Returns for the stock were 3% in 2021, 40% in 2022, -4% in 2023, and 10% in 2024.

The Trefis High Quality Portfolio, with a collection of 30 stocks, is less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment around rate cuts and geopolitical tensions, could LMT face a similar situation as it did in 2021, 2023, and 2024 and underperform the S&P over the next 12 months — or will it see a strong jump? After its recent fall, we think LMT stock has some room for growth. We now estimate Lockheed Martin’s Valuation to be $515 per share, around 12% above its current market price of around $460. Our forecast is based on a 19x forward expected earnings of $27.17 per share. The 19x figure aligns with the stock’s average P/E multiple over the last three years.

While LMT stock looks like it has some room for growth, it is helpful to see how Lockheed Martin’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

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