Lockheed Martin (LMT) Stock Forecast & Price Target

Lockheed Martin's management anticipates operating margins to expand by 10-20 basis points annually, aiming for approximately 11% by 2027, driven by program de-risking and the implementation of 1LMX initiatives. The company reported $16.2 billion in segment revenue for 2023, reflecting a 0.6% year-over-year increase, with projected growth for F-35 sustainment revenues expected to achieve a 10% compound annual growth rate, rising from $4.3 billion in 2024 to about $7.5 billion by 2030. Additionally, the company's missile and fire control segment is expected to experience accelerated growth due to increasing defense funding, positioning Lockheed Martin favorably in the context of rising global defense spending.

The analysis reveals a declining trend in Lockheed Martin's financial performance, with earnings per share expected to decrease from $5.81 in 2021 to an estimated $4.75 in 2024, highlighting significant contraction in profitability. Furthermore, overall revenue fell by 1% in 4Q24, missing consensus expectations, and the defense sector's valuation has deteriorated substantially, with a compression of the relative PE multiple to 0.82x, which is below historical norms despite ongoing geopolitical threats. Lastly, the company's operating margins have diminished from approximately 11% in 2019 to around 9.5% in 2024, influenced by inflation, operational pressures, and an uncertain defense spending landscape, which casts doubt on future growth prospects.