We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will a Surge in US Defense Spending Boost LMT's Prospects?
Read MoreHide Full Article
Key Takeaways
LMT is positioned to benefit if Congress approves a major rise in U.S. defense spending through 2027.
LMT's heavy exposure to F-35 jets, missiles and naval systems ties growth to higher Pentagon contracts.
LMT trades at a lower forward P/S than the industry and shares rose 10.5% in the past three months.
Lockheed Martin (LMT - Free Report) could benefit from the proposed increase in U.S. defense spending under President Trump’s plan, which targets annual military expenditures of around $1.5 trillion by 2027. This represents a substantial jump from nearly $901 billion defense budget approved for fiscal 2026. Such a significant expansion in defense outlays signals stronger long-term funding support for military modernization and procurement programs.
As one of the largest U.S. defense contractors, Lockheed Martin has deep exposure to key defense areas. An expanded defense budget typically translates into a higher volume of contracts for leading defense primes. LMT derives most of its revenues from U.S. government contracts for platforms, such as F-35 fighter jets, missiles, helicopters and naval systems, positioning it well to capture a meaningful share of any increase in Pentagon spending.
Long-term financial commitments and increased defense budgets would also enable Lockheed Martin to expand its manufacturing capacity. The business might gain longer-term contracts, boost production rates and enhance supply-chain efficiency. Longer contracts would help improve operational planning and lessen revenue unpredictability, especially for high-volume products like military aircraft and missiles.
The proposed increase in military spending still requires approval from the Congress, and final budget allocations may differ from initial proposals. However, the general upward trend in defense spending is expected to result in larger and more frequent contract opportunities for Lockheed Martin, supporting its revenue growth prospects.
Defense Players Likely to Gain From Budget Expansion
Other defense companies which are expected to benefit from the rise in the U.S. defense budget are:
RTX Corporation (RTX - Free Report) stands to benefit from the proposed sharp increase in U.S. defense spending, as higher budgets would support long-term funding for missile defense, radar systems and advanced weapons programs where the company is a key supplier.
Northrop Grumman (NOC - Free Report) has a strong position in strategic defense programs — including missile defense, space systems and advanced aircraft — and rising defense budgets should support continued investment in next-generation deterrence and advanced radar, sensor and other high-priority national security programs.
LMT Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 earnings per share implies an increase of 33.95% year over year.
Image Source: Zacks Investment Research
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.66X, a discount to the industry’s average of 2.76X.
Image Source: Zacks Investment Research
LMT Stock’s Price Performance
In the past three months, the company’s shares have risen 10.5% compared with the industry’s 5.8% growth.
Image: Bigstock
Will a Surge in US Defense Spending Boost LMT's Prospects?
Key Takeaways
Lockheed Martin (LMT - Free Report) could benefit from the proposed increase in U.S. defense spending under President Trump’s plan, which targets annual military expenditures of around $1.5 trillion by 2027. This represents a substantial jump from nearly $901 billion defense budget approved for fiscal 2026. Such a significant expansion in defense outlays signals stronger long-term funding support for military modernization and procurement programs.
As one of the largest U.S. defense contractors, Lockheed Martin has deep exposure to key defense areas. An expanded defense budget typically translates into a higher volume of contracts for leading defense primes. LMT derives most of its revenues from U.S. government contracts for platforms, such as F-35 fighter jets, missiles, helicopters and naval systems, positioning it well to capture a meaningful share of any increase in Pentagon spending.
Long-term financial commitments and increased defense budgets would also enable Lockheed Martin to expand its manufacturing capacity. The business might gain longer-term contracts, boost production rates and enhance supply-chain efficiency. Longer contracts would help improve operational planning and lessen revenue unpredictability, especially for high-volume products like military aircraft and missiles.
The proposed increase in military spending still requires approval from the Congress, and final budget allocations may differ from initial proposals. However, the general upward trend in defense spending is expected to result in larger and more frequent contract opportunities for Lockheed Martin, supporting its revenue growth prospects.
Defense Players Likely to Gain From Budget Expansion
Other defense companies which are expected to benefit from the rise in the U.S. defense budget are:
RTX Corporation (RTX - Free Report) stands to benefit from the proposed sharp increase in U.S. defense spending, as higher budgets would support long-term funding for missile defense, radar systems and advanced weapons programs where the company is a key supplier.
Northrop Grumman (NOC - Free Report) has a strong position in strategic defense programs — including missile defense, space systems and advanced aircraft — and rising defense budgets should support continued investment in next-generation deterrence and advanced radar, sensor and other high-priority national security programs.
LMT Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 earnings per share implies an increase of 33.95% year over year.
Image Source: Zacks Investment Research
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.66X, a discount to the industry’s average of 2.76X.
Image Source: Zacks Investment Research
LMT Stock’s Price Performance
In the past three months, the company’s shares have risen 10.5% compared with the industry’s 5.8% growth.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.