Update shared on05 Sep 2025
Fair value Decreased 1.45%Analysts have modestly reduced Lockheed Martin’s price target to $476.67, citing concerns over unexpected program charges, CFO transition risks, and execution challenges—offset by improving global defense budgets and attractive valuation.
Analyst Commentary
- Bullish analysts highlight that Lockheed Martin’s current valuation is attractive given accelerating global defense budgets, seeing shares as “too cheap to ignore” despite recent charges and low sentiment.
- Bearish analysts express concern about the $1.8 billion in broad, unexpected program charges, noting these could depress future free cash flow, margins, and the ability to meet the upper end of multi-year growth goals.
- The recent CFO change is viewed as possibly signaling a “kitchen sink” quarter, raising the risk of additional charges materializing in upcoming periods.
- Ongoing F-35 program and execution issues are seen as significant overhangs that may restrict upward estimate revisions and keep the stock range-bound for the near term.
- Improved U.S. and global defense budget trends provide a constructive backdrop; however, sector sentiment remains mixed, with the coming earnings season viewed as a key inflection point for clarity on unresolved issues.
What's in the News
- Lockheed Martin is in discussions with Rheinmetall to manufacture ATACMS and Hellfire missiles in Germany, expanding its European production footprint (Reuters).
- China has restricted the supply of critical minerals, including rare earths, to Western defense manufacturers, impacting Lockheed Martin and delaying production (WSJ).
- President Trump’s proposed defense budget prioritizes increased spending on missiles and drones, which may benefit Lockheed Martin despite flat overall budget growth (Reuters).
Valuation Changes
Summary of Valuation Changes for Lockheed Martin
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $483.67 to $476.67.
- The Future P/E for Lockheed Martin remained effectively unchanged, moving only marginally from 19.21x to 18.93x.
- The Consensus Revenue Growth forecasts for Lockheed Martin remained effectively unchanged, at 4.1% per annum.
Disclaimer
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