Lockheed Martin

Lockheed says costs tied to its F-35 Lots 18-19 aircraft contract began to exceed the advanced acquisition contract value in 3Q as funding lagged. The defense company remains in negotiations with the U.S. government over the deal, but says it was unable to recognize revenue and profit on about $400 million of costs incurred on the program during the quarter, plus about $300 million due to snags on the supply chain. Lockheed says it was prevented from invoicing and receiving about $450 million through the quarter and also had about $2 billion in potential termination liability exposure related to its Lots 18-19 deal. The company expects some of these issues to let up in the fourth quarter, but until a final agreement is reached, its results will continue to be negatively impacted, Lockheed says. Shares fall 5.2% to $582.60.

Lockheed Martin (LMT) is the “prime” defense stock to own amid escalating global tensions, while the company’s recently increased share repurchase authorization supports an expected improvement in free cash flows, RBC Capital Markets said. The war in the Middle East “has elevated the global threat level, which we believe will support greater urgency around the (2025 US Department of Defense) budget process and could contribute to higher international sales,” the brokerage said in a client note emailed Monday. Historical trends show that the defense industry usually outperforms during periods of monetary easing by an average of 23%, with “greater outperformance 12 months after the start of easing,” RBC analyst Ken Herbert wrote. Last month, the Federal Reserve cut its benchmark lending rate by 50 basis points to a range of 4.75% to 5%. “We believe the beginning of a new easing period, coupled with increased geopolitical tensions recently, will increase

Lockheed Martin’s (LMT) recently approved $3 billion increase in its buyback program will drive positive investor sentiment as it supports the company’s confidence in improving free cash flow, RBC Capital Markets said in a note Monday. The investment bank increased its price target on Lockheed’s stock to $675 from $600. “We believe a shareholder-friendly capital allocation strategy on the back of the strong FCF generation will continue to be a positive for sentiment,” RBC said, noting that the company is guiding to $6.2 billion free cash flow for 2024, just flat from a year earlier. This comes alongside major margin opportunity from Lockheed’s ongoing deliveries of the F-35 fighter jets, and as defense stocks are expected to outperform at a time of lower interest rates, RBC said. Additionally, Lockheed’s Q3 results are expected to be positive and well-received by investors, according to the note. The results are scheduled for release

Lockheed Martin will start delivering some of the dozens of parked F-35s after the Pentagon agrees to accept jets with an interim software fix that would allow them to be used for training. They won’t be combat ready until next year. Lockheed had expected to deliver between 75 and 110 F-35s this year — the last was in December — and dozens of jets worth more than $10 billion have been left in storage. Lockheed has said it expects to deliver 75-110 this year, unlocking final cash payments, with the Pentagon able to clear the backlog at a rate of 20 a month.

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%,

Lockheed Martin (NYSE:LMT) reported quarterly earnings of $6.39 per share which beat the analyst consensus estimate of $5.79 by 10.36 percent. The company reported quarterly sales of $17.200 billion which beat the analyst consensus estimate of $15.992 billion by 7.56 percent. This is a 13.71 percent increase over sales of $15.126 billion the same period last year.

The following is a summary of the Lockheed Martin Corporation (LMT) Q1 2024 Earnings Call Transcript: Financial Performance: Lockheed Martin reported Q1 sales of $17.2 billion, a 14% Year over Year (YoY) increase. Operating profit stood at $1.7 billion while GAAP earnings per share were $6.39, each falling by 3% compared to the previous year. The company reported a hefty backlog of $159 billion. Lockheed generated $1.3 billion in free cash flow. Despite strong revenue growth in Q1, the company is cautious of potential losses exceeding $1 billion on a classified program, though this risk is accounted for in their guidance. Business Progress: Lockheed Martin’s ongoing projects and deliveries include the F-16 Block 70 jets, Air-launched Rapid Response Weapon (ARRW), and a novel homeland missile defense system (called the next-generation interceptor or NGI). The company has announced a partnership with Intel to support the simulated transition for Advanced Microelectronics Packaging.

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target price of $457, up $17, reflects 16.5x our 2025 EPS estimate, in line with LMT’s historical forward average. We lift our 2024 EPS estimate by $0.21 to $26.29 and 2025’s by $0.57 to $27.72. Q1 EPS of $6.33 vs. $6.43 beat consensus by $0.47. We think supplemental spending, which has passed the House but has yet to pass the Senate, could be additive to overall Department of Defense spending, although probably not by much more than inflation. Q1 sales of $17.2B rose 5% year-over-year on a normalized basis. LMT reaffirmed 2024 revenue guidance in a range of $68.5B to $70.0B and EPS in a range of $25.65 to $26.35. The midpoints imply low-single-digit revenue growth accompanied by some margin compression because EPS is expected

Lockheed Martin’s (LMT) F-35 fighter jets have risen in sustainment costs, about 44% to $1.58 trillion in 2023 from $1.1 trillion in 2018, the US Government Accountability Office said in a report Monday. Despite the increase in projected costs, the US Department of Defense plans to use less of the jets due to reliability issues and the fleet’s overall availability, which has “trended downward considerably” over the past five years, the report said. The DOD currently has about 630 F-35s in its fleet and plans to buy another 2,500 by the mid-2040s. The GAO said it had made 43 recommendations to the DOD since 2014 to improve the fleet’s operation and sustainment, but an overwhelming majority of them were yet to be implemented. The recommendations include improving the F-35 program’s management of spare parts and reassessing government and contractor responsibility for different aspects of the fleet.

JP Morgan analyst Seth Seifman upgrades Lockheed Martin (NYSE:LMT) from Neutral to Overweight and raises the price target from $475 to $518.

Lockheed Martin Takes Next Step in Homeland Missile Defense Interceptor Acquisition Process HUNTSVILLE, Ala., Feb. 28, 2024 Company continues unprecedented progress to advance Next Generation Interceptor program HUNTSVILLE, Ala., Feb. 28, 2024  — In November 2023, Lockheed Martin (NYSE: LMT) successfully completed a Missile Defense Agency (MDA) acquisition milestone for the nation’s modernized long range ballistic missile interceptor. The company completed the first Knowledge Point — known as KP1 — ahead of schedule, taking a major contractual step forward that allows its Next Generation Interceptor (NGI) program to continue development towards the Critical Design Review (CDR). During KP1, the MDA evaluated Lockheed Martin’s development progress to date. This includes completing design review milestones and demonstrating significant maturation across critical technologies, manufacturing readiness, and utility of the company’s NGI Software Factory. This KP1 achievement follows the program’s All Up Round Preliminary Design Review, which Lockheed Martin executed on-schedule in September. “I’m

Lockheed Martin In 2024, On Track To Double Himars Production, Increased Javelin’s Production To 2,400 Units/Yr, Will Deliver More Than 10,000 GMLRS.