Lockheed Martin (LMT): Examining Valuation After Strong Q3 Results, Record Backlog, and Dividend Hike

Lockheed Martin (LMT) made headlines after reporting third-quarter results that highlighted solid performance across all its major business arms. The company’s strong operational showing led to record backlog levels, higher sales, and an increased full-year forecast.

See our latest analysis for Lockheed Martin.

Lockheed Martin’s year has included fresh multi-billion dollar contract wins, a record backlog, and a 5% dividend boost, all reinforcing its position as a cornerstone of the defense sector. Despite this string of positive developments, the stock’s 1-year total return sits at -12.8%, reflecting market caution after a period of outperformance. However, momentum has picked up lately, with a strong 16.7% share price return in the latest 90 days. Taken together, Lockheed Martin’s blend of steady contract growth and recent buybacks is fueling optimism for a rebound, even as investors weigh broader defense spending trends.

If the company’s mix of contract momentum and shareholder returns got your attention, you’ll want to discover See the full list for free.

With these upgrades in guidance and the stock still trailing its highs, investors are left to ponder whether Lockheed Martin’s fundamentals point to an undervalued opportunity or if the market has already priced in its future growth.

Most Popular Narrative: 0.9% Undervalued

Lockheed Martin’s fair value, according to the most widely followed narrative, stands fractionally higher than its recent closing price. The latest consensus presents a case where market value still trails projected fundamentals, setting up a debate over the underlying drivers of the company’s worth.

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 could lift revenues and provide opportunities for higher-margin, next-generation products.

Read the complete narrative.

Curious about the bedrock assumptions propelling this valuation? The heart of the story features long-term demand, operational discipline, and bold forecasts for future profitability. Want to see which bottom-line moves analysts expect to justify today’s faint discount? Unlock the inner workings behind the valuation mystery now.

Result: Fair Value of $493.71 (UNDERVALUED)

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

However, persistent cost overruns or shifts in U.S. defense spending could quickly challenge bullish forecasts and affect Lockheed Martin’s growth outlook.

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

Build Your Own Lockheed Martin Narrative

If you want a fresh perspective or prefer to chart your own course, you can dig into the numbers and craft a narrative in just minutes. Do it your way

A great starting point for your Lockheed Martin research is our analysis highlighting 4 key rewards and 2 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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