What Happened?
Shares of security and Aerospace company Lockheed Martin (NYSE: LMT) jumped 3.8% in the afternoon session after Citi upgraded its stock rating to Buy and the company announced a series of significant defense contracts, signaling strong business momentum.
Citi analyst John Godyn raised the firm's price target on Lockheed Martin to $582 from $571, citing the company's strong fundamentals and the rapid growth of its missile and fire control segment. This positive assessment was supported by news of several major contract wins. The U.S. Army awarded the company's missile and fire control business a $347.5 million contract to develop and test improvements for prototype air and missile defense systems.
Additionally, reports highlighted other substantial deals, including a $35.5 billion Pentagon contract for THAAD interceptors and a separate $2.9 billion radar contract with the U.S. Army, reinforcing investor confidence in the company's backlog and revenue prospects.
The shares were trading at $543.90, up 4.2% from the previous close.
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What Is The Market Telling Us
Lockheed Martin’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 6.6% on the news that the company reported disappointing second-quarter results and sharply lowered its full-year profit forecast.
The aerospace and defense giant announced second-quarter earnings of $1.46 per share, a significant miss from analyst expectations, driven by $1.6 billion in pre-tax losses on several programs. These included a $950 million loss on a classified aeronautics program and additional losses on helicopter programs for Canada and Turkey.
Consequently, Lockheed slashed its full-year 2025 earnings per share (EPS) guidance to a range of $21.70 to $22.00, a steep reduction from its prior forecast of $27.00 to $27.30. While the company maintained its full-year sales forecast, the substantial charges and reduced profit outlook rattled investors. The company's cash flow also weakened considerably, with free cash flow turning negative in the quarter, a stark contrast to the positive inflow a year ago.
Lockheed Martin is up 9.4% since the beginning of the year, but at $543.90 per share, it is still trading 19.6% below its 52-week high of $676.70 from March 2026. Investors who bought $1,000 worth of Lockheed Martin’s shares 5 years ago would now be looking at an investment worth $1,426.
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