Analysts Have Made A Financial Statement On Lockheed Martin Corporation's (NYSE:LMT) Annual Report

Shareholders might have noticed that Lockheed Martin Corporation (NYSE:LMT) filed its full-year result this time last week. The early response was not positive, with shares down 5.4% to US$432 in the past week. Results were roughly in line with estimates, with revenues of US$68b and statutory earnings per share of US$27.55. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Lockheed Martin

Following the latest results, Lockheed Martin's 22 analysts are now forecasting revenues of US$69.0b in 2024. This would be an okay 2.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 9.0% to US$26.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$68.7b and earnings per share (EPS) of US$26.76 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$485, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lockheed Martin, with the most bullish analyst valuing it at US$550 and the most bearish at US$380 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Lockheed Martin shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lockheed Martin's past performance and to peers in the same industry. We would highlight that Lockheed Martin's revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2024 being well below the historical 3.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lockheed Martin is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lockheed Martin. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lockheed Martin's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lockheed Martin analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Lockheed Martin you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.