Lockheed Martin Stock Dips As BofA Analyst Lowers EPS Estimates, Forecast After Air Force Contract Setback
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 24 2025
0mins
Should l Buy LMT?
Source: Benzinga
Stock Downgrade: Lockheed Martin's shares fell after BofA Securities analyst Ronald J. Epstein downgraded the stock from Buy to Neutral and reduced its price forecast significantly, following the company's loss of a major contract to Boeing for the Next Generation Air Dominance program.
Earnings Concerns: The analyst expressed concerns about Lockheed Martin's earnings quality, the loss of key aircraft programs, and lowered growth expectations, leading to revised EPS estimates for 2025, 2026, and 2027.
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Analyst Views on LMT
Wall Street analysts forecast LMT stock price to fall
12 Analyst Rating
4 Buy
7 Hold
1 Sell
Hold
Current: 607.490
Low
430.00
Averages
535.50
High
605.00
Current: 607.490
Low
430.00
Averages
535.50
High
605.00
About LMT
Lockheed Martin Corporation is a global aerospace and defense company. The Company is engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Its segments include Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft. MFC segment provides air and missile defense systems, manned and unmanned ground vehicles, energy management solutions, and others. RMS segment designs, manufactures, services and supports various military and commercial helicopters, surface ships, sea and land-based missile defense systems, and others. Its Space segment is engaged in the research and design, development, engineering and production of satellites, space transportation systems, and strategic, advanced strike, and defensive systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Order Backlog: Lockheed Martin's backlog reached $194 billion at the end of 2025, with expectations for further growth in 2026, indicating sustained demand and stable revenue sources in the defense sector.
- Revenue Growth Potential: The company's revenue is projected to increase from $75 billion in 2023 to between $77.5 billion and $80 billion, reflecting significant market opportunities as the defense budget is set to rise from $1 trillion to $1.5 trillion by 2027.
- Investment in Innovative Technologies: Lockheed Martin's investments in hypersonic missiles, artificial intelligence, and electronic warfare, along with its Skunkworks division's R&D capabilities, ensure its leading position in future defense technologies.
- Attractive Valuation Levels: With a forward price-to-earnings ratio of 20, Lockheed Martin presents an appealing investment opportunity compared to other high-valuation defense stocks like Palantir Technologies, making it an ideal choice for investors.
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- Project Completion Timeline: The work is expected to be completed by September 30, 2030, providing ample time for high-quality R&D to meet the long-term strategic needs of the U.S. Navy.
- Clear Funding Source: The $850.41 million will be obligated from FY2026 U.S. Navy weapons procurement funds, with no risk of fund expiration in the current fiscal year, ensuring financial stability for the company.
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- Lockheed Martin Contract: Lockheed Martin secured a $4.7 billion preliminary contract to boost annual production of the Patriot missile from 600 to 2,000 units, ensuring multiyear predictable demand and further solidifying its market position in missiles and fire control.
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- Lockheed Martin Contracts: The company secured a $4.7 billion preliminary contract to increase annual production of the Patriot missile from 600 to 2,000 units, ensuring multiyear predictable demand and further solidifying its market position in missiles and fire control.
- Northrop Grumman Opportunities: Northrop plays a critical role in strategic deterrence and next-generation defense systems, with the U.S. government expected to spend over $100 billion on the Sentinel program, providing long-term revenue visibility and facilitating the transition to production.
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- Rocket Lab Opportunity: Rocket Lab secured an $816 million contract for missile-detection satellites, benefiting from high-level security clearances and a vertically integrated satellite business, although its current price-to-sales ratio of 65 indicates significant risks for investors.
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- Positive Market Reaction: Israel's central bank governor noted that markets are responding positively to the latest peace developments, with major markets holding near record highs, reflecting investor optimism for stability in the region despite ongoing geopolitical uncertainties.
- U.S. Diplomatic Efforts: President Trump plans to invite Israeli Prime Minister Netanyahu and Lebanese President Aoun for talks, further advancing the improvement of relations between the two countries and highlighting the U.S.'s active role in the Middle East peace process.
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See More
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- Strong Order Backlog: Lockheed Martin's backlog reached $194 billion at the end of 2025, with expectations for further growth in 2026, indicating sustained demand and stable revenue sources in the defense sector.
- Revenue Growth Potential: The company's revenue is projected to increase from $75 billion in 2023 to between $77.5 billion and $80 billion, reflecting significant market opportunities as the defense budget is set to rise from $1 trillion to $1.5 trillion by 2027.
- Investment in Innovative Technologies: Lockheed Martin's investments in hypersonic missiles, artificial intelligence, and electronic warfare, along with its Skunkworks division's R&D capabilities, ensure its leading position in future defense technologies.
- Attractive Valuation Levels: With a forward price-to-earnings ratio of 20, Lockheed Martin presents an appealing investment opportunity compared to other high-valuation defense stocks like Palantir Technologies, making it an ideal choice for investors.
See More
Lockheed Martin Secures $850M Contract Modification for TRIDENT II Program
- Significant Contract Value: Lockheed Martin Space has secured an $850.41 million contract modification for the TRIDENT II (D5) Life Extension 2 program, showcasing the company's robust position in the defense sector.
- Project Completion Timeline: The work is expected to be completed by September 30, 2030, providing ample time for high-quality R&D to meet the long-term strategic needs of the U.S. Navy.
- Clear Funding Source: The $850.41 million will be obligated from FY2026 U.S. Navy weapons procurement funds, with no risk of fund expiration in the current fiscal year, ensuring financial stability for the company.
- Strategic Systems Programs: The contract is managed by the Strategic Systems Programs, indicating Lockheed Martin's ongoing leadership in critical defense projects and potentially paving the way for future contract opportunities.
See More
Trump Advocates for Nearly $1.5 Trillion Military Budget for 2027
- Military Budget Increase: President Trump is advocating for a military budget approaching $1.5 trillion for 2027, a significant rise from nearly $1 trillion in 2026, reflecting increased military and operational costs due to the Iran conflict, which may drive renewed interest in defense stocks amid geopolitical tensions.
- Lockheed Martin Contract: Lockheed Martin secured a $4.7 billion preliminary contract to boost annual production of the Patriot missile from 600 to 2,000 units, ensuring multiyear predictable demand and further solidifying its market position in missiles and fire control.
- Northrop Grumman's Strategic Role: Northrop Grumman plays a critical role in the U.S. nuclear deterrence system, with the government expected to invest over $100 billion in its Sentinel land-based missile program, providing multiyear revenue visibility and supporting future growth.
- RTX Global Demand Expansion: RTX has approximately 47% of its backlog from international customers, and with NATO allies planning to increase defense spending from 2% to 3.5% of GDP, global defense budgets are projected to grow at 3% to 4% annually over the next five years, serving as a significant growth catalyst for the company.
See More
Lockheed Martin's Long-Term Growth Potential Driven by F-35 Program
- Defense Budget Increase: President Trump is advocating for a U.S. military budget approaching $1.5 trillion for 2027, significantly up from nearly $1 trillion in 2026, which will provide more stable funding for defense companies, especially amid escalating geopolitical tensions.
- Lockheed Martin Contracts: The company secured a $4.7 billion preliminary contract to increase annual production of the Patriot missile from 600 to 2,000 units, ensuring multiyear predictable demand and further solidifying its market position in missiles and fire control.
- Northrop Grumman Opportunities: Northrop plays a critical role in strategic deterrence and next-generation defense systems, with the U.S. government expected to spend over $100 billion on the Sentinel program, providing long-term revenue visibility and facilitating the transition to production.
- Strong Performance of RTX: RTX excels in both defense and commercial aviation sectors, generating $7.9 billion in free cash flow in fiscal 2025, with a record backlog of approximately $268 billion, ensuring robust revenue growth prospects for the future.
See More
Surge in US Defense Budget Creates Opportunities in Defense Stocks
- Defense Budget Surge: The proposed US defense budget for 2027 reaches $1.5 trillion, a $500 billion increase from 2026's $1 trillion, highlighting urgent modernization needs and expected growth in defense contracts for related companies.
- Rocket Lab Opportunity: Rocket Lab secured an $816 million contract for missile-detection satellites, benefiting from high-level security clearances and a vertically integrated satellite business, although its current price-to-sales ratio of 65 indicates significant risks for investors.
- Lockheed Martin's Steady Growth: As a leading legacy contractor, Lockheed Martin excels in projects like the F-35 fighter jet, with a cumulative revenue growth of 62% over the last decade, offering a relatively stable investment with a P/E ratio of 20 and a P/S ratio of 1.9.
- Palantir's Meteoric Rise: Palantir Technologies signed a $10 billion, 10-year contract with the U.S. Army, with a 70% year-over-year revenue growth last quarter, but its high price-to-sales ratio of 81.5 necessitates caution for potential investors due to premium valuation risks.
See More
Israel and Lebanon Reach Historic Ceasefire Agreement
- Historic Ceasefire Agreement: Israel and Lebanon have reached a 10-day ceasefire agreement in Washington, marking the first meaningful talks between the two nations since 1983, potentially paving the way for a broader peace agreement in the Middle East.
- Positive Market Reaction: Israel's central bank governor noted that markets are responding positively to the latest peace developments, with major markets holding near record highs, reflecting investor optimism for stability in the region despite ongoing geopolitical uncertainties.
- U.S. Diplomatic Efforts: President Trump plans to invite Israeli Prime Minister Netanyahu and Lebanese President Aoun for talks, further advancing the improvement of relations between the two countries and highlighting the U.S.'s active role in the Middle East peace process.
- Impact of Iranian Situation: Trump mentioned that the war in Iran is progressing well and is expected to end soon, a statement that could influence regional security dynamics and market reactions, prompting investors to monitor future military and diplomatic developments.
See More
