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    Lockheed Martin (LMT) Stock May Be 35% Undervalued On PAC 3 Edge Debut

    Simply Wall St·10/11/2026 06:25:40
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    Lockheed Martin has delivered a 59.3% total return over the past 5 years. The bigger question for you today is whether that share price now lines up with the cash the business is expected to generate over time.

    • A 59.3% gain over 5 years puts real weight on whether the current valuation still matches what Lockheed Martin’s cash flows can support.
    • Fresh missile defense programs like PAC-3 Edge and a record order backlog may support expectations for future cash generation and influence how investors think about the stock’s Discounted Cash Flow (DCF) intrinsic value.
    • If you'd rather focus on earnings, this one's for you. See what Lockheed Martin's 18.7x P/E says about the price.

    The stock's next move may depend on whether that current price near US$509 already reflects the full value of Lockheed Martin’s future cash flows or still leaves a gap.

    If you want a wider benchmark for Lockheed Martin's cash flow story, compare it with other solid balance sheet and fundamentals stocks screener (25 results).

    Does Lockheed Martin Look Undervalued on Cash Flow?

    The Discounted Cash Flow (DCF) approach here takes Lockheed Martin’s forecast free cash flows and discounts them back to today in dollar terms. On this model, the business is expected to move from latest twelve month free cash flow of about $8.6 billion to projected annual cash generation in the low to mid teens of billions over the coming decade, which implies a growing profile rather than a shrinking one.

    Those assumptions lean on programs like PAC-3 Edge, missile defense contracts and a large backlog to support steady expansion in future cash flows. The DCF output currently sits substantially above the share price of $509.59. The recent report of an 11% year on year sales increase and a record $230 billion backlog helps explain why a cash flow model can justify a richer value than where the stock trades today. Find out what Lockheed Martin could be worth using our Discounted Cash Flow (DCF) estimate.

    The Lockheed Martin Narrative: What Would Justify Today's Price?

    Narratives pick up where the valuation question for Lockheed Martin leaves off by explaining what kind of future growth, margins and earnings path would need to occur for the stock to be worth meaningfully more or less than today’s price on Simply Wall St’s Community page. Each scenario links a fair value estimate to a specific mix of potential catalysts and risks, allowing you to track over time which version of Lockheed Martin's story appears to be unfolding.

    One of the top community narratives on Lockheed Martin: 20% undervalued

    "Lockheed Martin is moving munitions like PAC-3, THAAD, PrSM and JATM onto seven year framework agreements that aim to triple or quadruple production..."

    Discover why this Narrative puts Lockheed Martin at 20% undervalued.

    One More Angle On Lockheed Martin That Could Change The Story

    Lockheed Martin’s cash flow profile and backlog only tell part of the story, because the people setting priorities and how they are rewarded can push outcomes in very different directions. See who runs Lockheed Martin and how they are paid.

    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.