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Boeing vs. Lockheed: Which Aerospace Stock Is the Better Player in 2025?
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Key Takeaways
Boeing shows signs of recovery with $23.67B in cash and lower operating outflows in Q1 2025.
Lockheed Martin backs solid cash flow with $796M in dividends and $750M in share buybacks.
BA faces reputational risks from quality issues and a recent 787 crash, weighing on its recovery.
As global defense spending rises amid escalating geopolitical tensions and rapid advances in warfare technology, investor interest in military aerospace stocks is heating up. Two major players in this space, The Boeing Company (BA - Free Report) and Lockheed Martin Corp. (LMT - Free Report) , present compelling yet distinct investment stories for 2025.
While both stocks are deeply integrated into the U.S. defense infrastructure, their business models and growth drivers differ. Boeing, long known for its commercial aviation dominance, also maintains a strong defense footprint through its Defense, Space & Security segment, which delivers fighter jets, surveillance platforms, and cybersecurity-linked space technologies to clients like the U.S. Department of Defense. Lockheed, on the other hand, is a pure-play defense contractor. With flagship programs such as the F-35 Lightning II and Hellfire missiles, its revenue stream is more stable and defense-focused.
Given the strategic importance of long-term military contracts and national security programs, both companies remain vital to the evolving defense landscape. However, their diverging exposures to commercial market volatility in Boeing’s case and concentrated defense reliance in Lockheed’s case shape distinct risk-reward profiles.
As we weigh these factors, a key question emerges: Which stock is better positioned to soar higher in 2025? Let’s explore their financials, growth catalysts, and headwinds to determine the stronger aerospace contender.
Financial Stability & Growth Drivers: BA vs LMT
At the end of the first quarter of 2025, Boeing had $23.67 billion in cash and equivalents, with current debt of $7.93 billion, well below its cash balance, indicating strong near-term solvency. Boeing also successfully reduced its operating cash outflow to $1.62 billion from $3.36 billion a year ago, reflecting gradual financial recovery, particularly in its commercial segment.
Lockheed Martin’s balance sheet reflects strong near-term solvency, with $1.80 billion in cash and cash equivalents versus $1.64 billion in current debt as of March 30, 2025. Its robust operating cash flow of $1.41 billion in first-quarter 2025 supports significant shareholder returns. The company paid $796 million in dividends during the quarter, reflecting a 2% year-over-year increase. Additionally, LMT repurchased 1.7 million shares worth $750 million in the first three months of 2025. These figures highlight Lockheed’s healthy financial position and commitment to rewarding shareholders.
From the perspective of growth drivers, the expansionary U.S. defense budget stands out as a major catalyst for both Boeing and Lockheed. The proposed 13% hike in the U.S. defense budget for fiscal 2026 under President Trump includes funding for Boeing’s F-47 sixth-generation fighter aircraft program. Meanwhile, Lockheed is poised to benefit from the budget proposal’s focus on prioritizing investments in U.S. space dominance and the development of the Golden Dome, a next-generation missile defense shield. Lockheed’s established leadership in missile defense and space exploration positions it well to capitalize on these initiatives.
Defense budget apart, a diverse growth catalyst benefiting Boeing is its solid involvement in the global aerospace service market, particularly in the commercial aviation segment. To this end, the company forecasts a $4.4-trillion market opportunity for commercial aviation support and services in the 20-year period between 2024 and 2043. This, in turn, should bode well for the Boeing Global Services (“BGS”) business unit over the long run.
On the other hand, innovative defense products in the pipeline are expected to continue to strengthen Lockheed’s position in the global defense map and support its title of America’s largest defense contractor. The company has multiple programs from business segments that are entering growth stages. The programs include the F-35 sustainment activity, increased Patriot Advanced Capability-3 (PAC-3) production rate, increased demand for High Mobility Artillery Rocket System and Guided Multiple Launch Rocket Systems, radar surveillance systems and CH-53K King Stallion heavy lift helicopter, as well as the modernization of and enhancements to the Trident II D5 Fleet Ballistic Missile.
Risks of Investing in Boeing vs. Lockheed
Despite being a renowned commercial jet manufacturer, Boeing has been facing significant execution and reputational risks, mainly due to persistent quality control problems in its commercial division, especially with the 737 MAX and 787 programs. A labor strike in September 2024, combined with the quality issues, caused a temporary production halt, leading to a large buildup of inventory for 737, which, in turn, has been laying pressure on this jet maker’s bottom-line performance (in the form of high inventory storage and maintenance cost).
The recent Air India flight crash in June 2025, involving Boeing’s 787 Dreamliner, has once again put one of its major commercial programs under spotlight. In case any faulty spare part or jet equipment is found to be the primary reason behind this crash, progress made by BA’s commercial airplane over the past two quarters will be affected.
Lockheed, on the other hand, experienced performance issues on a classified fixed-price incentive fee contract in its Aeronautics business segment and periodically recognized reach-forward losses. As of March 30, 2025, cumulative losses were approximately $825 million. Going forward, the company may incur additional losses if it experiences further performance issues, increases in scope, or cost growth, which could have a material impact to its financial results.
How Do Zacks Estimates Compare for BA & LMT?
The Zacks Consensus Estimate for Boeing’s 2025 sales implies a year-over-year rise of 25.6%, and the same for its loss suggests an improvement. The stock’s annual bottom-line estimates have shown an upward trend over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lockheed’s 2025 sales implies a year-over-year rise of 4.7%, while that for its earnings suggests a decline of 4.2%. Further, bottom-line estimates for 2025 have been trending northward over the past 60 days, while the same for 2026 has moved southward.
Image Source: Zacks Investment Research
Stock Price Performance: BA vs LMT
BA (up 10.2%) has outperformed LMT (up 6.9%) over the past three months and has done the same in the past year. Shares of BA have surged 15%, while those of LMT have inched up 0.9% in the past year.
Image Source: Zacks Investment Research
Valuation of LMT More Attractive Than That of BA
LMT is trading at a forward sales multiple of 1.46X, below BA’s 1.69X.
Image Source: Zacks Investment Research
ROIC: BA vs LMT
The image below shows that BA’s Return on Invested Capital (“ROIC”) came in below EADSY’s. Its negative figure suggests that the American jet giant is not generating enough profit from its investments to cover the cost of its capital.
Image Source: Zacks Investment Research
Conclusion
Both Boeing and Lockheed offer distinct investment propositions.
Lockheed stands out for its solid balance sheet, consistent cash flow, and reliable shareholder returns. It also benefits from strong defense-focused growth drivers and a diverse, expanding portfolio of military programs. Boeing, while showing signs of financial recovery and long-term potential through its commercial services and defense exposure, remains weighed down by operational and reputational risks.
Metric-wise, Zacks consensus estimates suggest stronger revenue growth for Boeing in 2025, while the company also beat Lockheed at the bourses.
However, with a more attractive valuation and better return metrics, Lockheed appears to be the more resilient and dependable defense stock, particularly for investors seeking lower risk and consistent returns in a volatile geopolitical environment.
Image: Shutterstock
Boeing vs. Lockheed: Which Aerospace Stock Is the Better Player in 2025?
Key Takeaways
As global defense spending rises amid escalating geopolitical tensions and rapid advances in warfare technology, investor interest in military aerospace stocks is heating up. Two major players in this space, The Boeing Company (BA - Free Report) and Lockheed Martin Corp. (LMT - Free Report) , present compelling yet distinct investment stories for 2025.
While both stocks are deeply integrated into the U.S. defense infrastructure, their business models and growth drivers differ. Boeing, long known for its commercial aviation dominance, also maintains a strong defense footprint through its Defense, Space & Security segment, which delivers fighter jets, surveillance platforms, and cybersecurity-linked space technologies to clients like the U.S. Department of Defense. Lockheed, on the other hand, is a pure-play defense contractor. With flagship programs such as the F-35 Lightning II and Hellfire missiles, its revenue stream is more stable and defense-focused.
Given the strategic importance of long-term military contracts and national security programs, both companies remain vital to the evolving defense landscape. However, their diverging exposures to commercial market volatility in Boeing’s case and concentrated defense reliance in Lockheed’s case shape distinct risk-reward profiles.
As we weigh these factors, a key question emerges: Which stock is better positioned to soar higher in 2025? Let’s explore their financials, growth catalysts, and headwinds to determine the stronger aerospace contender.
Financial Stability & Growth Drivers: BA vs LMT
At the end of the first quarter of 2025, Boeing had $23.67 billion in cash and equivalents, with current debt of $7.93 billion, well below its cash balance, indicating strong near-term solvency. Boeing also successfully reduced its operating cash outflow to $1.62 billion from $3.36 billion a year ago, reflecting gradual financial recovery, particularly in its commercial segment.
Lockheed Martin’s balance sheet reflects strong near-term solvency, with $1.80 billion in cash and cash equivalents versus $1.64 billion in current debt as of March 30, 2025. Its robust operating cash flow of $1.41 billion in first-quarter 2025 supports significant shareholder returns. The company paid $796 million in dividends during the quarter, reflecting a 2% year-over-year increase. Additionally, LMT repurchased 1.7 million shares worth $750 million in the first three months of 2025. These figures highlight Lockheed’s healthy financial position and commitment to rewarding shareholders.
From the perspective of growth drivers, the expansionary U.S. defense budget stands out as a major catalyst for both Boeing and Lockheed. The proposed 13% hike in the U.S. defense budget for fiscal 2026 under President Trump includes funding for Boeing’s F-47 sixth-generation fighter aircraft program.
Meanwhile, Lockheed is poised to benefit from the budget proposal’s focus on prioritizing investments in U.S. space dominance and the development of the Golden Dome, a next-generation missile defense shield. Lockheed’s established leadership in missile defense and space exploration positions it well to capitalize on these initiatives.
Defense budget apart, a diverse growth catalyst benefiting Boeing is its solid involvement in the global aerospace service market, particularly in the commercial aviation segment. To this end, the company forecasts a $4.4-trillion market opportunity for commercial aviation support and services in the 20-year period between 2024 and 2043. This, in turn, should bode well for the Boeing Global Services (“BGS”) business unit over the long run.
On the other hand, innovative defense products in the pipeline are expected to continue to strengthen Lockheed’s position in the global defense map and support its title of America’s largest defense contractor. The company has multiple programs from business segments that are entering growth stages. The programs include the F-35 sustainment activity, increased Patriot Advanced Capability-3 (PAC-3) production rate, increased demand for High Mobility Artillery Rocket System and Guided Multiple Launch Rocket Systems, radar surveillance systems and CH-53K King Stallion heavy lift helicopter, as well as the modernization of and enhancements to the Trident II D5 Fleet Ballistic Missile.
Risks of Investing in Boeing vs. Lockheed
Despite being a renowned commercial jet manufacturer, Boeing has been facing significant execution and reputational risks, mainly due to persistent quality control problems in its commercial division, especially with the 737 MAX and 787 programs. A labor strike in September 2024, combined with the quality issues, caused a temporary production halt, leading to a large buildup of inventory for 737, which, in turn, has been laying pressure on this jet maker’s bottom-line performance (in the form of high inventory storage and maintenance cost).
The recent Air India flight crash in June 2025, involving Boeing’s 787 Dreamliner, has once again put one of its major commercial programs under spotlight. In case any faulty spare part or jet equipment is found to be the primary reason behind this crash, progress made by BA’s commercial airplane over the past two quarters will be affected.
Lockheed, on the other hand, experienced performance issues on a classified fixed-price incentive fee contract in its Aeronautics business segment and periodically recognized reach-forward losses. As of March 30, 2025, cumulative losses were approximately $825 million. Going forward, the company may incur additional losses if it experiences further performance issues, increases in scope, or cost growth, which could have a material impact to its financial results.
How Do Zacks Estimates Compare for BA & LMT?
The Zacks Consensus Estimate for Boeing’s 2025 sales implies a year-over-year rise of 25.6%, and the same for its loss suggests an improvement. The stock’s annual bottom-line estimates have shown an upward trend over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lockheed’s 2025 sales implies a year-over-year rise of 4.7%, while that for its earnings suggests a decline of 4.2%. Further, bottom-line estimates for 2025 have been trending northward over the past 60 days, while the same for 2026 has moved southward.
Image Source: Zacks Investment Research
Stock Price Performance: BA vs LMT
BA (up 10.2%) has outperformed LMT (up 6.9%) over the past three months and has done the same in the past year. Shares of BA have surged 15%, while those of LMT have inched up 0.9% in the past year.
Image Source: Zacks Investment Research
Valuation of LMT More Attractive Than That of BA
LMT is trading at a forward sales multiple of 1.46X, below BA’s 1.69X.
Image Source: Zacks Investment Research
ROIC: BA vs LMT
The image below shows that BA’s Return on Invested Capital (“ROIC”) came in below EADSY’s. Its negative figure suggests that the American jet giant is not generating enough profit from its investments to cover the cost of its capital.
Image Source: Zacks Investment Research
Conclusion
Both Boeing and Lockheed offer distinct investment propositions.
Lockheed stands out for its solid balance sheet, consistent cash flow, and reliable shareholder returns. It also benefits from strong defense-focused growth drivers and a diverse, expanding portfolio of military programs. Boeing, while showing signs of financial recovery and long-term potential through its commercial services and defense exposure, remains weighed down by operational and reputational risks.
Metric-wise, Zacks consensus estimates suggest stronger revenue growth for Boeing in 2025, while the company also beat Lockheed at the bourses.
However, with a more attractive valuation and better return metrics, Lockheed appears to be the more resilient and dependable defense stock, particularly for investors seeking lower risk and consistent returns in a volatile geopolitical environment.
Both Boeing and Lockheed carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.