Lockheed Martin, RTX lift 2026 forecasts as Pentagon looks to restock weapons

Lockheed and RTX rallied as both projected strong forward profits amid replenishment demand from ongoing conflicts. Lockheed’s missiles and fire control revenue rose nearly 20% to $4.1B and backlog jumped 38.3% to $230.4B; it lifted 2026 revenue guidance to $79.75B-$81.75B (vs. $79.14B analyst consensus). RTX raised 2026 adjusted sales to $95B-$96B and lifted adjusted profit guidance to $7.10-$7.25/share (from $6.70-$6.90), supported by Raytheon weapons sales up 18% to $8.27B.

Analysis

The market is still underpricing the quality of this defense reacceleration: not all backlog is equal, and the mix is shifting toward missiles, interceptors, and sustainment where pricing and margin leverage are better than on legacy platform programs. That makes LMT and RTX more attractive than the broader aerospace complex, because the binding constraint is capacity and component flow, not demand. Second-order winners are the solid-rocket-motor, energetics, seeker, and electronics suppliers, plus European coproduction partners that can help de-bottleneck production without waiting for a full new budget cycle.

The key risk is timing. A lot of the thesis is 6-18 months out, while the stock move is immediate; if appropriations slip, if ceasefire headlines reduce urgency, or if production ramps prove slower than promised, the multiple can retrace even with strong backlogs. RTX’s commercial MRO exposure adds a nearer-term cushion, but it is also a reminder that this is partly a supply-chain distortion trade: if aircraft deliveries normalize faster, that support fades over 1-2 quarters.

Contrarian view: consensus is treating this as a simple earnings beat, but the deeper story is a multi-year inventory reset that should keep unit economics favorable. The more interesting question is execution—who can actually convert backlog into revenue fastest without margin leakage. On that score, LMT looks like the cleaner missile leverage play, while RTX offers better balance because defense upside is supplemented by aftermarket resilience.

Key Decisions for Investors

• Long LMT on a 1-3 month pullback rather than chasing the gap; target 10-15% upside over 3-6 months, with thesis invalidation if 2026 revenue guidance is revised down or missile production targets slip.
• Long RTX vs short JETS over 1-3 months to express the higher-for-longer MRO backdrop and defense upside while hedging broad airline beta; unwind if airline delivery bottlenecks ease materially or maintenance demand normalizes faster than expected.
• Add a watchlist basket for NOC, LHX, and European defense suppliers on any evidence of follow-on missile procurement or coproduction awards; best entry is after the first round of enthusiasm fades, not on the initial headline.
• Avoid shorting the defense move outright for now; the near-term catalyst path is still favorable, and the cleaner contrarian signal would only emerge if order activity decelerates or appropriations rhetoric stalls into the next budget round.