Lockheed Martin (LMT): Assessing Valuation as Shares Retreat 9% in the Past Month

Lockheed Martin (LMT) shares have dipped recently, catching investor attention as the stock trades down about 9% over the past month, but up 8% in the past 3 months. This creates a compelling entry point to revisit its financial fundamentals.

See our latest analysis for Lockheed Martin.

Lockheed Martin’s shares have retreated sharply in the past month, even after a healthy run in the previous quarter. While the 1-year total shareholder return is down 16.5%, its 3-year total return is a positive 7%. This reflects mixed sentiment and some short-term volatility rather than a fundamental change to its long-term story.

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With shares trading at a notable discount to both analyst targets and some intrinsic value estimates, is Lockheed Martin currently undervalued, or is the market already factoring in its future growth prospects, potentially leaving little room for further upside?

Most Popular Narrative: 13% Undervalued

Lockheed Martin's most popular narrative sets a higher fair value than the current market price, suggesting upside potential for the stock. It anchors its price view well above the last close of $458.35, contrasting with a consensus fair value estimate of $526.88.

Demand for advanced platforms such as the F-35, PAC-3, THAAD, and hypersonic weapons is being reinforced by actual combat use and rising geopolitical tensions. Multiple U.S. and international customers are increasing orders, and strong backlog growth is likely, positioning Lockheed Martin for robust top-line (revenue) growth in the future.

Read the complete narrative.

Curious what ambitious growth targets are fueling this valuation? The narrative hinges on a series of aggressive earnings milestones and a forward profit multiple that signals analyst confidence in both demand and margin recovery. The real surprises lie in the ironclad revenue assumptions and future profitability projections. Dive in to see the full calculation behind this market call.

Result: Fair Value of $526.88 (UNDERVALUED)

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

However, persistent cost overruns and shifting U.S. defense budgets remain key risks. These factors could quickly challenge even the most optimistic outlook for Lockheed Martin.

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

Build Your Own Lockheed Martin Narrative

If you have a different take or want to dig deeper into the numbers yourself, you can craft your own Lockheed Martin story in just minutes. Do it your way

A great starting point for your Lockheed Martin research is our analysis highlighting 4 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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