{"id":5501,"date":"2023-10-26T05:42:53","date_gmt":"2023-10-26T05:42:53","guid":{"rendered":"https:\/\/infundpros.com\/markets\/after-an-8-rise-in-a-month-whats-next-for-lockheed-martin-stock\/"},"modified":"2023-10-26T05:42:55","modified_gmt":"2023-10-26T05:42:55","slug":"after-an-8-rise-in-a-month-whats-next-for-lockheed-martin-stock","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=5501","title":{"rendered":"After An 8% Rise In A Month What\u2019s Next For Lockheed Martin Stock"},"content":{"rendered":"
\n

Lockheed Martin<\/strong>
\n LMT
\n <\/fbs-ticker> (NYSE: LMT) reported its Q3 results last week, with revenues and earnings beating the street estimates. However, we believe that LMT stock has little room for growth. The company reported revenue of $16.9 billion, reflecting a 2% growth from the prior year period and above the $16.7 billion street estimate. Its adjusted earnings of $6.77 per share were down 1% y-o-y and above the consensus estimate of $6.68 per share. In this note, we discuss Lockheed Martin\u2019s stock performance, key takeaways from its recent results, and valuation.<\/p>\n

LMT stock has shown strong gains of 25% from levels of $355 in early January 2021 to around $445 now, vs. an increase of about 10% for the S&P 500 over this roughly 3-year period. However, the increase in LMT stock has been far from consistent. Returns for the stock were 0% in 2021, 37% in 2022, and -8% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 10% in 2023 – indicating that LMT underperformed the S&P<\/strong> in 2021 and 2023.<\/p>\n

In fact, consistently beating the S&P 500<\/strong> – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the industrials sector, including UPS, UNP, and CAT, and even for the mega-cap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year<\/strong> over the same period. Why is that?<\/strong> As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index, less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.<\/p>\n

Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could LMT face a similar situation as it did in 2021 and 2023 and underperform the S&P<\/strong> over the next 12 months – or will it see a strong jump? From a valuation perspective, LMT stock looks appropriately priced. We estimate Lockheed Martin\u2019s Valuation<\/strong> to be $458 per share, reflecting only a 3% upside from its current levels of $446. Our forecast is based on a 17x P\/E multiple for LMT and expected earnings of $27.12 on a per-share and adjusted basis for the full year 2023. The 17x P\/E multiple aligns with the stock\u2019s last three-year average. The company kept its earnings per share outlook range of $27.00 and $27.20 unchanged.<\/p>\n

<\/fbs-ad><\/p>\n

Lockheed Martin\u2019s revenue of $16.9 billion in Q3 was up 2% y-o-y. The company reported a 9% rise in Rotary & Mission Systems sales, led by increased warfare systems and sensor sales. Space segment sales were up 8%, driven by the Next Generation Interceptor and Fleet Ballistic Missiles programs. The Aeronautics segment saw a 5% fall in sales due to lower volume for F-35 production contracts. The company saw its operating margin fall to 12.1% from 13.0% in the prior year quarter. Higher revenues and margin contraction led to a 1% y-o-y fall in the bottom line to $6.77 on a per-share and adjusted basis in Q3\u201923.<\/p>\n

LMT stock looks fairly priced at $446, trading at 1.6x sales, compared to the last five-year average of 1.5x We believe investors will likely be better off waiting for a dip to enter LMT for better gains in the long run. Lower F-35 deliveries and margin contraction are some of the factors that can weigh on LMT stock in the near term. However, rising geopolitical concerns with the ongoing Russia-Ukraine and Israel-Hamas wars will likely result in increased defense spending, boding well for Lockheed Martin in the long run.<\/p>\n

While LMT stock looks appropriately priced, it is helpful to see how Lockheed Martin\u2019s Peers<\/strong> fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons<\/strong>.<\/strong><\/p>\n

Invest with Trefis <\/strong>Market Beating Portfolios<\/strong><\/p>\n

See all Trefis <\/strong>Price Estimates<\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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