Best 2 Blue Chip Stocks to Buy After Last Week's Market Pullback

The article argues Lockheed Martin and Deere are attractive blue-chip buys, with Lockheed supported by a $186 billion backlog, expected 18% annual earnings growth, and a 2.6% dividend yield. Deere is presented as a cyclical recovery play, trading at 29x 2026 earnings while analysts expect more than 15% annual EPS growth over the next three to five years. The piece is mostly opinionated stock commentary, so near-term market impact should be limited.

Analysis

The cleaner read here is not “buy defense” and “buy cyclicals,” but that capital is rotating toward assets with visible backlog or trough earnings while macro uncertainty keeps optionality valuable. LMT’s setup is less about the headline conflict and more about the sequencing problem: replenishment orders can lift bookings quickly, but margin conversion tends to lag as missile and aircraft programs remain labor- and supplier-constrained. That means the first tradable move is usually multiple expansion on backlog visibility, not an immediate step-up in FCF.

For DE, the market is pricing trough conditions into a business that historically re-rates sharply before the cycle actually turns. The subtle catalyst is not a near-term crop price rebound; it is financing normalization and replacement demand once farm balance sheets stabilize, which can happen 2-3 quarters before reported earnings inflect. In that sense, DE is a “recover before it looks cheap” trade, and the current valuation can stay elevated while earnings are depressed if the market starts discounting 2027-2028 power.

The contrarian miss is that both names have different hidden risk profiles: LMT faces political/appropriations risk if defense spending shifts from quantity to procurement discipline, while DE is exposed to a protracted rural credit tightening cycle that could keep used equipment values under pressure longer than consensus expects. AI is a real long-dated angle for DE, but it is unlikely to move the stock until there is evidence of margin-accretive autonomy adoption, not just product rhetoric. The near-term upside in both names likely comes from sentiment and estimate revisions rather than fundamental acceleration.

Key Decisions for Investors

• Long LMT on a 1-3 month horizon via equity or call spreads; target a re-rating toward the high-teens P/E as backlog visibility improves. Stop-loss on any sign of procurement delay or commentary suggesting production bottlenecks are pushing deliveries out 2+ quarters.
• Accumulate DE on weakness over the next 4-8 weeks, but size for a slow cycle turn; prefer a staged entry because the stock can remain expensive while earnings are still bottoming. Upside is in a 6-12 month re-rate if ag balance sheets stabilize and replacement demand reappears.
• Pair trade: long LMT / short a basket of less-visible industrial laggards with weaker backlog coverage. The relative trade should work even if the broader market is range-bound, because LMT has the cleaner estimate-support catalyst.
• For more convex exposure, use DE call spreads dated 6-9 months out instead of outright stock. This captures the “buy the trough before the data turns” setup while limiting drawdown if farm income stays soft longer than expected.
• Avoid chasing NVDA/INTC off the article’s AI reference; the mention is thematic, not a near-term revenue catalyst. If anything, treat DE’s autonomy angle as a longer-dated optionality premium, not a reason to pay up today.