Lockheed Martin (LMT): Revisiting Valuation After Recent Share Price Strength
Lockheed Martin (LMT) has quietly pushed higher recently, with the stock up about 3% over the past week and roughly 10% in the past month, outpacing the broader defense space.
See our latest analysis for Lockheed Martin.
Zooming out, Lockheed Martin’s latest share price of $497.07 comes after a choppy few months. The recent 1 month share price return nearly offsets a softer 3 month patch, while a solid 1 year total shareholder return suggests momentum is starting to rebuild rather than fade.
If you want to see what else is taking off in the sector, now is a good time to scan aerospace and defense stocks for other potential ideas.
With earnings still growing, the stock trading below analysts’ targets, and intrinsic value models hinting at a discount, the key question is whether Lockheed Martin is quietly undervalued or whether the market is already pricing in future growth.
Most Popular Narrative Narrative: 5.9% Undervalued
With Lockheed Martin closing at $497.07 against a most popular narrative fair value near $528, the story leans toward moderate upside based on disciplined cash flow assumptions.
The analysts have a consensus price target of $476.667 for Lockheed Martin based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $544.0, and the most bearish reporting a price target of just $398.0.
Want to see how steady revenue growth, rising margins and a lower future earnings multiple can still justify a higher value than today’s price? The full narrative breaks down the interplay between long term profit expansion, share count changes and a richer, but not aggressive, valuation bar that anchors this fair value call.
Result: Fair Value of $528.17 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, significant fixed price program cost overruns, along with shifting U.S. defense budget priorities, could quickly erode margins and undermine the current upside case.
Find out about the key risks to this Lockheed Martin narrative.
Build Your Own Lockheed Martin Narrative
If you see the story differently or want to dig into the numbers yourself, you can easily build a personalized view in just a few 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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