Deutsche Bank has adjusted its outlook on Lockheed Martin (NYSE: LMT), reducing the aerospace and defense company's price target from $620.00 to $611.00.
Despite the adjustment, the firm retained a Buy rating on the stock. The decision followed Lockheed Martin's release of third-quarter financial results for 2024, which showed revenues falling slightly short of expectations by approximately 2%.
However, the company's segment earnings before interest and taxes (EBIT) and earnings per share (EPS) outperformed predictions, coming in 2% and 5% higher than anticipated, respectively.
Lockheed Martin's free cash flow (FCF) was a highlight, surpassing Street estimates by a significant 37%. Analysts had anticipated certain outcomes that aligned with the results, such as a miss in aeronautics sales due to an underestimated impact of F-35 contract delays and a margin beat in the Missiles and Fire Control (MFC) segment due to incorrect modeling of AIM-260 charges.
Despite these positives, concerns were raised regarding the performance in the Aeronautics segment. The report mentioned a second consecutive charge on a classified program, which was larger than the previous quarter, bringing the total cumulative charges to $415 million. This development has led to some incremental concerns about the company's future performance.
In other recent news, Lockheed Martin Corp (NYSE:LMT) has raised its profit and sales outlook for 2024, citing increased demand for military equipment. The company now expects a profit per share of $26.65 and full-year sales of $71.25 billion. However, Lockheed's F-35 fighter jet program has faced delays, affecting deliveries and leading to reduced returns for investors.
Similarly, Raytheon Technologies (NYSE:RTX) Corporation has increased its 2024 profit and sales forecasts, attributing the upward revision to robust demand for aircraft repairs and defense systems. The company now anticipates a full-year adjusted profit per share between $5.50 and $5.58 and revenue between $79.25 billion and $79.75 billion.
In addition, Australia has announced a $4.7 billion acquisition of SM-2 IIIC and SM-6 long-range missiles from the United States, enhancing its defense capabilities. Lockheed Martin has also appointed Chauncey McIntosh as the new vice president and general manager of the F-35 Lightning II Program.
Seaport Global Securities, RBC Capital Markets, and Deutsche Bank have all raised their price targets for Lockheed Martin, while the company's board has authorized an increase in its quarterly dividend and a $3 billion expansion of its share repurchase program.
InvestingPro Insights
Lockheed Martin's recent performance, as highlighted in Deutsche Bank's analysis, can be further contextualized with real-time data from InvestingPro. The company's market capitalization stands at $136.17 billion, reflecting its significant position in the Aerospace & Defense industry.
InvestingPro Tips reveal that Lockheed Martin has maintained dividend payments for 41 consecutive years and has raised its dividend for 22 consecutive years, underscoring its commitment to shareholder returns. This aligns with the company's strong free cash flow performance noted in the article. The current dividend yield is 2.29%, which may be attractive to income-focused investors.
The company's P/E ratio of 22.21 and Price to Book ratio of 18.91 suggest that the stock is trading at a premium, which is consistent with the "InvestingPro Tip" indicating that LMT is trading at a high P/E ratio relative to near-term earnings growth. This valuation metric should be considered alongside the company's recent financial performance and market position.
Despite some concerns raised in the article about segment performance, InvestingPro data shows that Lockheed Martin has achieved a strong return over the last three months, with a 15.74% price total return. This positive momentum extends to a 26.96% return over the past six months, indicating investor confidence in the company's prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Lockheed Martin, providing a deeper dive into the company's financial health and market position.
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