Tuesday, Truist Securities began covering Lockheed Martin (NYSE:LMT) shares, assigning a Buy rating and setting a price target of $579. The firm's analysts view the recent 24.5% drop in Lockheed Martin's share price as an attractive buying opportunity. According to InvestingPro data, the stock currently trades near its Fair Value, with analyst targets ranging from $434 to $700. They express confidence in the company's prospects, despite concerns related to defense expenditure and the DOGE cryptocurrency.
Truist Securities' coverage starts amid market apprehensions that resemble those from the Sequestration period, a time of automatic spending cuts in the United States. However, the analysts argue that such comparisons are exaggerated.
They highlight that the current threat level remains high and anticipate that both U.S. and NATO defense spending will continue to escalate in the future. The company's strong market position is reflected in its impressive dividend history, having maintained payments for 41 consecutive years with a current yield of 2.73%.
Lockheed Martin's F-35 program has been under scrutiny, with some market participants fearing potential cutbacks or cancellations. Nevertheless, Truist Securities sees these concerns as having a low probability of materializing in the near term. The analysts believe that the management's growth strategy will likely turn out to be more cautious than necessary.
The analysts also suggest that the company's financial outlook could be stronger than expected. They predict that revenues from missile programs will drive growth and that free cash flow (FCF) forecasts might be revised upwards, indicating a solid financial trajectory for Lockheed Martin.
Lockheed Martin, a major player in the aerospace and defense sector, has experienced volatility in its stock performance, which analysts at Truist Securities believe has now presented a favorable entry point for investors. The firm's initiation of coverage with a Buy rating reflects a positive outlook on the company's future performance.
In other recent news, Lockheed Martin has announced key leadership changes, with OJ Sanchez and Mike Shoemaker stepping into new roles at the Skunk Works® division and the Integrated Fighter Group, respectively.
The company also launched a new subsidiary, Astris AI, focusing on providing artificial intelligence solutions for the U.S. defense industrial base. Lockheed Martin has refuted rumors concerning the cancellation of its $1 trillion F-35 fighter jet contract, categorically dismissing them as false.
The company completed the sale of $1 billion in senior unsecured notes, a move aimed at managing its capital structure. Lockheed Martin's subsidiary, Sikorsky, is set to demonstrate its MATRIX™ flight autonomy system using an Optionally Piloted UH-60 Black Hawk® helicopter in a series of demonstrations scheduled throughout 2025.
On the financial front, Lockheed Martin reported strong earnings and revenue results, surpassing estimated third-quarter earnings per share of $6.50 with an EPS of $6.80. The company also increased its full-year 2024 revenue guidance by 0.4% to approximately $71.25 billion.
In response to these developments, Jefferies maintained a Hold rating on Lockheed Martin but reduced the company's price target from $590.00 to $580.00. These are among the recent developments at Lockheed Martin.
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