Lockheed Martin (LMT): A Fresh Look at Valuation After Recent Share Price Momentum

Lockheed Martin (LMT) is back on the radar for many investors this week, as recent moves in the stock are starting to generate fresh conversation. There was no major event or new announcement triggering this attention, but sometimes, inaction or unexplained shifts can be just as intriguing. When a company the size of Lockheed Martin sees movement, even without a headline-driving catalyst, it can spark questions about whether sentiment is starting to shift, especially for long-term holders who watch for signs beneath the surface. Looking at the bigger picture, Lockheed Martin’s stock has moved higher around 7% this month, building on moderate increases over the past 3 months. Despite these recent gains, the stock is still in the red for the year, with a 1-year return just below zero and longer-term performance remaining solid thanks to steady returns over 3 and 5-year periods. This mix of short-term momentum and longer-term value makes it a compelling candidate for a closer look, particularly as the broader market recalibrates its view of defense and aerospace companies. With this recent uptick and Lockheed Martin’s relatively muted annual performance, is this a time to take advantage of discounted value, or is the market accurately pricing in where future growth is headed?

Most Popular Narrative: 2% Overvalued

Lockheed Martin is currently viewed as slightly overvalued by the most widely followed narrative, with analysts seeing only a slim premium over what they consider fair value. The current fair value is based on a blend of future earnings, revenue growth, and profit margin assumptions underpinned by analyst consensus.

“Lockheed Martin's technological leadership in areas like stealth, electronic warfare, hypersonics, and integrated air/missile defense systems is being validated by operational success and customer priorities. This supports future contract wins and an expanding addressable market, which should lift revenues and provide opportunities for higher-margin, next-generation products.”

Want to know what’s fueling these sky-high expectations? The heartbeat of this narrative is ambitious growth targets along with a profit outlook that could shake up industry norms. Curious about the specific analyst projections that power this fair value? The answer might just surprise you.

Result: Fair Value of $476.67 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, several risks remain, including continued program charges and execution issues, which could dampen confidence in Lockheed Martin’s growth story going forward.

Find out about the key risks to this Lockheed Martin narrative.

Another View: A Different Look at Value

While analysts see Lockheed Martin as slightly overvalued right now, our DCF model comes to a very different conclusion. It suggests the company could be undervalued if earnings and cash flows hold up. Which approach feels more convincing to you?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Lockheed Martin to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Lockheed Martin Narrative

If the current story does not quite align with your perspective, or you want to dig into the numbers yourself, you can build your own narrative in just a few minutes. Do it your way

A great starting point for your Lockheed Martin research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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