Our 12-month target price of $557, raised by $100, reflects a 19.5x multiple applied to our 2025 EPS estimate. The applied multiple is above LMT’s historical forward average, but defendable, in our view, as we think Department of Defense spending on munitions will accelerate over the medium term due to ongoing conflicts in Ukraine, Gaza, and the potential threat from a more aggressive China. We keep our 2024 EPS estimate at $26.29 and raise 2025’s by $0.86 to $28.58. Shares of LMT have underperformed year-to-date, up just 2.6% versus a peer average gain of 6.8% and the S&P 500, up 7.5%. We think the earliest key catalyst is likely a 2025 Appropriations bill by Congress, which we think has a good probability of being deferred until 2025, as defense hawks may be able to drive improved spending levels. Shares yield 2.7%, and we estimate a 2025 payout ratio of 44%, which we think is manageable. Finally, our DCF model, which estimates a 10-year free cash flow CAGR of 7%, sees shares as undervalued.