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.
LMT Outperforms Industry in 3 Months: What's Next for Investors?
Read MoreHide Full Article
Key Takeaways
Lockheed Martin shares surged 19.3% in three months, outperforming the industry's decline.
LMT secured major deals, boosting backlog to $193.6B and advancing space leadership via Artemis II mission.
LMT faces $950M program losses and high debt, signaling risks despite solid earnings growth outlook.
Lockheed Martin’s (LMT - Free Report) shares have risen 19.3% in the past three months, outperforming the Zacks Aerospace-Defense industry’s decline of 4%. Its broad product offerings allow it to secure major defense contracts, boosting its backlog count. Apart from enjoying a strong forte on the domestic front, Lockheed Martin’s products are also well acclaimed in the international market.
Image Source: Zacks Investment Research
Other defense stocks like The Boeing Company (BA - Free Report) remains one of the largest U.S. commercial aircraft manufacturers. Steadily growing commercial air travel should boost Boeing’s services business unit. BA’s shares have lost 9.4% in the past three months. Northrop Grumman (NOC - Free Report) boasts a solid presence in Defense and Cyber Security programs, with its product line being well positioned in high-priority categories. Northrop Grumman’s shares have gained 15% during the same period.
Considering Lockheed Martin’s outperformance compared with its industry, investors might be left wondering if this is a good time to add the stock to their portfolio. Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.
Tailwinds for LMT Stock
Lockheed Martin clinched several notable deals in the fourth quarter of 2025, including a contract for 18 space vehicles for its Tranche 3 Tracking Layer (TRKT3) constellation, with a potential value of more than $1 billion. It also secured a $233 million contract to deliver IRST21 Block II systems and initial spares to the U.S. Navy and Air National Guard (“ANG”). These order flows have resulted in a solid backlog, which totaled $193.6 billion as of Dec. 31, 2025.
On April 1, 2026, Lockheed Martin’s Orion spacecraft launched aboard NASA’s Space Launch System rocket from Kennedy Space Center, Florida, initiating the historic Artemis II mission and marking humanity’s first crewed return toward the Moon in more than five decades. This milestone strengthens LMT’s financial outlook and strategic position in space. As the prime contractor for Orion, each successful mission reinforces NASA’s reliance on the program, increasing the likelihood of continued production orders and long-term support contracts that generate steady revenues.
In March 2026, Lockheed Martin opened its Rapid Fielding Center, a facility that streamlines the end-to-end development, testing and prototype production of next-generation systems and solutions for U.S. government customers. Overall, this strengthens LMT’s ability to secure future defense programs and scale production faster.
Challenges Faced by LMT Stock
Lockheed Martin experienced performance issues on a classified fixed-price incentive fee contract in its Aeronautics business segment and periodically recognized reach-forward losses. During 2025, the company recorded losses of $950 million on this program. It also reported losses of $570 million in the Canadian Maritime Helicopter Program, $95 million in the Turkish Utility Helicopter Program at its RMS business segment and $140 million of unfavorable profit adjustments on C-130 programs at its Aeronautics business segment. The company may incur additional losses in the future if it experiences further performance issues, scope increases, or cost growth, which could materially affect its financial results.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) has risen 0.47% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 18.57%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Boeing’s 2026 EPS has decreased 33.8% over the past 60 days. The Zacks Consensus Estimate for Northrop Grumman’s 2026 EPS has declined 0.39% over the past 60 days. NOC’s long-term earnings growth rate is 4.8%.
LMT’s Earnings Surprise History
The company beat on earnings in each of the trailing four quarters, delivering an average surprise of 14.01%.
Image Source: Zacks Investment Research
LMT’s Debt Position
Currently, the company’s total debt to capital is 76.35%, higher than the industry’s average of 48.79%.
Image Source: Zacks Investment Research
LMT’s time-to-interest earned ratio at the end of the fourth quarter of 2025 was 6.3. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.8X, a discount to the industry’s average of 2.45X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin secured multiple major defense and space contracts in late 2025, strengthening its backlog and reinforcing steady future demand for its systems. Recent milestones, including the Orion Artemis II mission and the opening of its Rapid Fielding Center, enhance its long-term growth by boosting space leadership, accelerating innovation, and improving its ability to win and scale future programs.
Considering its financial pressures and higher debt levels, new investors should wait and look for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s strong earnings growth outlook.
View the Zacks #1 Rank List
Image: Bigstock
LMT Outperforms Industry in 3 Months: What's Next for Investors?
Key Takeaways
Lockheed Martin’s (LMT - Free Report) shares have risen 19.3% in the past three months, outperforming the Zacks Aerospace-Defense industry’s decline of 4%. Its broad product offerings allow it to secure major defense contracts, boosting its backlog count. Apart from enjoying a strong forte on the domestic front, Lockheed Martin’s products are also well acclaimed in the international market.
Image Source: Zacks Investment Research
Other defense stocks like The Boeing Company (BA - Free Report) remains one of the largest U.S. commercial aircraft manufacturers. Steadily growing commercial air travel should boost Boeing’s services business unit. BA’s shares have lost 9.4% in the past three months. Northrop Grumman (NOC - Free Report) boasts a solid presence in Defense and Cyber Security programs, with its product line being well positioned in high-priority categories. Northrop Grumman’s shares have gained 15% during the same period.
Considering Lockheed Martin’s outperformance compared with its industry, investors might be left wondering if this is a good time to add the stock to their portfolio. Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.
Tailwinds for LMT Stock
Lockheed Martin clinched several notable deals in the fourth quarter of 2025, including a contract for 18 space vehicles for its Tranche 3 Tracking Layer (TRKT3) constellation, with a potential value of more than $1 billion. It also secured a $233 million contract to deliver IRST21 Block II systems and initial spares to the U.S. Navy and Air National Guard (“ANG”). These order flows have resulted in a solid backlog, which totaled $193.6 billion as of Dec. 31, 2025.
On April 1, 2026, Lockheed Martin’s Orion spacecraft launched aboard NASA’s Space Launch System rocket from Kennedy Space Center, Florida, initiating the historic Artemis II mission and marking humanity’s first crewed return toward the Moon in more than five decades. This milestone strengthens LMT’s financial outlook and strategic position in space. As the prime contractor for Orion, each successful mission reinforces NASA’s reliance on the program, increasing the likelihood of continued production orders and long-term support contracts that generate steady revenues.
In March 2026, Lockheed Martin opened its Rapid Fielding Center, a facility that streamlines the end-to-end development, testing and prototype production of next-generation systems and solutions for U.S. government customers. Overall, this strengthens LMT’s ability to secure future defense programs and scale production faster.
Challenges Faced by LMT Stock
Lockheed Martin experienced performance issues on a classified fixed-price incentive fee contract in its Aeronautics business segment and periodically recognized reach-forward losses. During 2025, the company recorded losses of $950 million on this program. It also reported losses of $570 million in the Canadian Maritime Helicopter Program, $95 million in the Turkish Utility Helicopter Program at its RMS business segment and $140 million of unfavorable profit adjustments on C-130 programs at its Aeronautics business segment. The company may incur additional losses in the future if it experiences further performance issues, scope increases, or cost growth, which could materially affect its financial results.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) has risen 0.47% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 18.57%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Boeing’s 2026 EPS has decreased 33.8% over the past 60 days. The Zacks Consensus Estimate for Northrop Grumman’s 2026 EPS has declined 0.39% over the past 60 days. NOC’s long-term earnings growth rate is 4.8%.
LMT’s Earnings Surprise History
The company beat on earnings in each of the trailing four quarters, delivering an average surprise of 14.01%.
Image Source: Zacks Investment Research
LMT’s Debt Position
Currently, the company’s total debt to capital is 76.35%, higher than the industry’s average of 48.79%.
Image Source: Zacks Investment Research
LMT’s time-to-interest earned ratio at the end of the fourth quarter of 2025 was 6.3. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.8X, a discount to the industry’s average of 2.45X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin secured multiple major defense and space contracts in late 2025, strengthening its backlog and reinforcing steady future demand for its systems. Recent milestones, including the Orion Artemis II mission and the opening of its Rapid Fielding Center, enhance its long-term growth by boosting space leadership, accelerating innovation, and improving its ability to win and scale future programs.
Considering its financial pressures and higher debt levels, new investors should wait and look for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s strong earnings growth outlook.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.