Lockheed Martin (LMT): Assessing Valuation as Earnings, Missile Orders, and Contract Wins Drive Renewed Investor Focus

Lockheed Martin (LMT) is back in focus as investor attention ramps up ahead of its earnings report. Recent government calls for increased missile production and new contract wins are shaping the company’s outlook this month.

See our latest analysis for Lockheed Martin.

Despite recent volatility and a hefty program charge, Lockheed Martin has continued to capture major defense contracts and government support, which has helped maintain investor confidence. The stock’s momentum has steadied, with a modest long-term tailwind as its five-year total shareholder return sits at just under 49%.

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With the stock trading near its analyst target while Lockheed Martin books record contracts and faces rising defense demand, the question for investors is clear: is there real value left here or is future growth already reflected in the price?

Most Popular Narrative: 5.8% Overvalued

Lockheed Martin’s most-followed narrative pins fair value at $476.67, a bit below the last close of $504.49. This puts the stock in the overvalued camp according to prevailing market watchers.

The growing focus on homeland defense initiatives such as "Golden Dome," missile warning networks, and increased munitions spending suggests future secular increases in U.S. defense budgets and multi-year, high-value contract awards. These factors are likely to contribute meaningfully to backlog, revenue visibility, and cash flow stability.

Read the complete narrative.

Want to see what really supports this price? The narrative leans on a powerful trio: official budget trends, technological leadership, and a healthy contract pipeline. The full narrative reveals the numbers behind why so many analysts are eyeing a multi-year ramp in profits and a premium multiple. Ready to see which assumptions drive their case for Lockheed?

Result: Fair Value of $476.67 (OVERVALUED)

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

However, persistent program charges and leadership transitions could dampen future profits and create uncertainty around Lockheed Martin’s steady growth expectations.

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

Another View: Discounted Cash Flow Model Suggests Upside

While market watchers see Lockheed Martin as 5.8% overvalued, our DCF model draws a different conclusion. Based on the company’s projected cash flows, the SWS DCF model suggests Lockheed shares are undervalued and could be worth around $572.45, which is well above the recent price. It raises the question: which approach better captures the company’s long-term potential?

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

Build Your Own Lockheed Martin Narrative

Prefer to form your own perspective? Dive into the data, challenge the consensus, and craft a custom Lockheed Martin thesis in just a few minutes with 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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