Investors Heavily Search Lockheed Martin Corporation (LMT): Here is What You Need to Know

Lockheed Martin (LMT) is under watch as its stock has underperformed both the S&P 500 and its industry over the past month, despite recent revenue and EPS beats. While current fiscal year earnings are projected to decline 4.2%, estimates for the next fiscal year show a potential 9.2% increase, with revenue growth also expected to continue; however, the stock currently holds a Zacks Rank #3, suggesting near-term performance in line with the broader market.

Analysis

Lockheed Martin's (LMT) shares have returned +0.9% over the past month, underperforming the Zacks S&P 500 composite's +3.6% change and the Zacks Aerospace - Defense industry's +6.1% gain during the same period. Current financial projections indicate a challenging near term, with expected earnings of $6.58 per share for the current quarter, representing a -7.5% year-over-year decline, and a consensus earnings estimate of $27.27 for the current fiscal year, indicating a -4.2% year-over-year change; both estimates have seen a marginal +0.1% upward revision in the last 30 days. Conversely, the consensus earnings estimate for the next fiscal year is $29.77, projecting a +9.2% increase, though this estimate has been revised down by -0.4% over the past month. Revenue growth is anticipated, with consensus sales estimates pointing to a +2.6% year-over-year increase for the current quarter, and +4.7% and +3.7% for the current and next fiscal years, respectively. In its last reported quarter, Lockheed Martin posted revenues of $17.96 billion, a +4.5% year-over-year increase, and an EPS of $7.28, significantly up from $6.33 a year ago, surpassing consensus EPS estimates by +14.83% and revenue estimates by +1.14%. The company has a consistent record of beating EPS estimates in each of the trailing four quarters. Lockheed Martin currently holds a Zacks Rank #3 (Hold), suggesting it may perform in line with the broader market in the near term, and is graded B on the Zacks Value Style Score, indicating it is trading at a discount to its peers.

Key Decisions for Investors

• Investors should consider LMT's Zacks Rank #3 (Hold) which suggests near-term performance is likely to be in line with the broader market, necessitating close observation of earnings estimate revisions for any change in fundamental outlook.
• The projected earnings per share decline of -4.2% for the current fiscal year warrants caution, however, the anticipated rebound with +9.2% EPS growth next fiscal year, combined with a Zacks Value Style Score of B, could be attractive for investors with a longer-term horizon focusing on value.
• Evaluate the recent underperformance of the stock relative to its industry peers against the company's strong history of EPS surprises and its current valuation, which indicates a discount compared to similar companies.