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LMT Stock Declines 23.1% in 3 Months: Exit Now or Stay Put?
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Key Takeaways
Lockheed Martin reported a $186.4 billion backlog, with 58% expected to be recognized in 24 months.
LMT won PAC-3 awards, Aegis training work through 2031 and delivered the Aegis BL9.C3.0 baseline.
Lockheed Martin faced program losses, F-16 delays and C-130 integration and delivery challenges.
Lockheed Martin’s (LMT - Free Report) shares have lost 23.1% over the past three months, underperforming the Zacks Aerospace-Defense industry’s decline of 13.2%. However, the company benefits from solid backlog. The shift toward longer-term demand commitments and planned production investment can improve munitions revenue visibility and supplier resiliency over time.
Image Source: Zacks Investment Research
Other defense stocks like The Boeing Company (BA - Free Report) remains one of the largest aircraft manufacturers in the world in terms of revenues, orders and deliveries, particularly in the commercial aerospace industry. RTX Corporation (RTX - Free Report) continues to receive ample orders for its wide range of combat-proven defense products from the Pentagon and its foreign allies. Shares of Boeing and RTX have declined 2.9% and 15.6%, respectively, over the past three months.
With Lockheed Martin lagging its industry, investors are likely questioning the stock’s near-term direction. A closer look at the company's strengths, challenges and growth drivers can help assess whether the recent weakness presents a buying opportunity or warrants caution.
Tailwinds for LMT Stock
Lockheed Martin continues to convert demand for key franchise programs into sizable awards, supporting revenue visibility over a multiyear horizon. In the first quarter of 2026, Missiles and Fire Control secured $7 billion in PAC-3 contracts, including a fully funded $4.8 billion undefinitized contract. The company also secured long-lead materials for F-35 Lots 20 and 21.
These order flows, together with continued activity across strategic missile, combat systems and sustainment work, underpinned a backlog of $186.4 billion as of March 29, 2026. Management expects about 34% of backlog to be recognized over the next 12 months and about 58% over the next 24 months, which supports the long-term revenue base.
Lockheed Martin recently secured a $200.8 million contract from the U.S. Navy to continue providing Aegis Combat System operator and maintenance training for six international naval customers through 2031. This award benefits Lockheed Martin by extending a stable source of recurring revenue and strengthening its long-term relationship with international Aegis users. As the original developer of the Aegis Combat System, the company is well positioned to provide ongoing training, software updates, system enhancements, and lifecycle support throughout the program's duration.
On June 1, 2026, Lockheed???Martin inaugurated an 88,000-square foot, purpose-built Missile Assembly Building 5 (MAB-5) in Courtland, AL. The state-of-the-art plant will produce the Next Generation Interceptor for the Missile Defense Agency and bolster the nation's layered missile defense architecture. MAB-5 brings together Lockheed Martin’s most advanced digital manufacturing tools and intelligent processes to drive efficient, repeatable production.
On May 28, 2026, Lockheed Martin delivered the first Integrated Combat System-enabled baseline, known as Aegis BL9.C3.0, to the U.S. Navy. The milestone combines the proven Aegis combat system with a modern software and computing architecture, enabling the Navy to deploy upgrades, certifications, and new capabilities across the fleet on a regular six-month cycle.
Challenges for LMT Stock
Lockheed Martin continues to face execution and cost-estimate risk on complex programs, particularly where fixed-price elements magnify the impact of schedule and performance issues. In the first quarter of 2026, the company recorded unfavorable profit adjustments on the F-16 program due to production performance and development delays, as well as on the C-130 program because of ongoing integration challenges and delivery delays.
The company also reported cumulative losses of about $1.8 billion on an Aeronautics classified program and about $1.46 billion on a classified program in MFC, with both programs still carrying accrued losses on the balance sheet and the potential for additional losses if scope, schedule or cost estimates move further.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates year-over-year growth of 29.24%. LMT’s long-term (three to five years) earnings growth rate is 18.48%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Boeing’s 2026 EPS indicates year-over-year growth of 98.6%. The Zacks Consensus Estimate for RTX’s 2026 EPS indicates year-over-year growth of 9.9%. RTX’s long-term earnings growth rate is 10.21%.
LMT’s Earnings Surprise History
The company beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 9.44%.
Image Source: Zacks Investment Research
LMT Stock’s Liquidity
The company’s current ratio is 1.14 compared with the industry’s average of 1.12. The ratio of more than one suggests a healthy liquidity position where the business can meet its immediate financial obligations without selling long-term assets.
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 1.47X, a discount to the industry’s average of 2.54X. This suggests that investors would be paying a lower price relative to the company’s expected sales growth compared with its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin continues to secure strong demand across its core defense programs, providing long-term revenue visibility and reinforcing its substantial backlog. Recent achievements, including expanded Aegis training support, investment in advanced missile production capabilities, and delivery of a next-generation Aegis software baseline, strengthen the company's position in defense modernization while creating recurring opportunities for upgrades, maintenance, and lifecycle support.
Considering its financial pressures and current price performance, new investors should wait and watch for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s earnings growth outlook and strong liquidity.
View the Zacks #1 Rank List
Image: Bigstock
LMT Stock Declines 23.1% in 3 Months: Exit Now or Stay Put?
Key Takeaways
Lockheed Martin’s (LMT - Free Report) shares have lost 23.1% over the past three months, underperforming the Zacks Aerospace-Defense industry’s decline of 13.2%. However, the company benefits from solid backlog. The shift toward longer-term demand commitments and planned production investment can improve munitions revenue visibility and supplier resiliency over time.
Image Source: Zacks Investment Research
Other defense stocks like The Boeing Company (BA - Free Report) remains one of the largest aircraft manufacturers in the world in terms of revenues, orders and deliveries, particularly in the commercial aerospace industry. RTX Corporation (RTX - Free Report) continues to receive ample orders for its wide range of combat-proven defense products from the Pentagon and its foreign allies. Shares of Boeing and RTX have declined 2.9% and 15.6%, respectively, over the past three months.
With Lockheed Martin lagging its industry, investors are likely questioning the stock’s near-term direction. A closer look at the company's strengths, challenges and growth drivers can help assess whether the recent weakness presents a buying opportunity or warrants caution.
Tailwinds for LMT Stock
Lockheed Martin continues to convert demand for key franchise programs into sizable awards, supporting revenue visibility over a multiyear horizon. In the first quarter of 2026, Missiles and Fire Control secured $7 billion in PAC-3 contracts, including a fully funded $4.8 billion undefinitized contract. The company also secured long-lead materials for F-35 Lots 20 and 21.
These order flows, together with continued activity across strategic missile, combat systems and sustainment work, underpinned a backlog of $186.4 billion as of March 29, 2026. Management expects about 34% of backlog to be recognized over the next 12 months and about 58% over the next 24 months, which supports the long-term revenue base.
Lockheed Martin recently secured a $200.8 million contract from the U.S. Navy to continue providing Aegis Combat System operator and maintenance training for six international naval customers through 2031. This award benefits Lockheed Martin by extending a stable source of recurring revenue and strengthening its long-term relationship with international Aegis users. As the original developer of the Aegis Combat System, the company is well positioned to provide ongoing training, software updates, system enhancements, and lifecycle support throughout the program's duration.
On June 1, 2026, Lockheed???Martin inaugurated an 88,000-square foot, purpose-built Missile Assembly Building 5 (MAB-5) in Courtland, AL. The state-of-the-art plant will produce the Next Generation Interceptor for the Missile Defense Agency and bolster the nation's layered missile defense architecture. MAB-5 brings together Lockheed Martin’s most advanced digital manufacturing tools and intelligent processes to drive efficient, repeatable production.
On May 28, 2026, Lockheed Martin delivered the first Integrated Combat System-enabled baseline, known as Aegis BL9.C3.0, to the U.S. Navy. The milestone combines the proven Aegis combat system with a modern software and computing architecture, enabling the Navy to deploy upgrades, certifications, and new capabilities across the fleet on a regular six-month cycle.
Challenges for LMT Stock
Lockheed Martin continues to face execution and cost-estimate risk on complex programs, particularly where fixed-price elements magnify the impact of schedule and performance issues. In the first quarter of 2026, the company recorded unfavorable profit adjustments on the F-16 program due to production performance and development delays, as well as on the C-130 program because of ongoing integration challenges and delivery delays.
The company also reported cumulative losses of about $1.8 billion on an Aeronautics classified program and about $1.46 billion on a classified program in MFC, with both programs still carrying accrued losses on the balance sheet and the potential for additional losses if scope, schedule or cost estimates move further.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates year-over-year growth of 29.24%. LMT’s long-term (three to five years) earnings growth rate is 18.48%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Boeing’s 2026 EPS indicates year-over-year growth of 98.6%. The Zacks Consensus Estimate for RTX’s 2026 EPS indicates year-over-year growth of 9.9%. RTX’s long-term earnings growth rate is 10.21%.
LMT’s Earnings Surprise History
The company beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 9.44%.
Image Source: Zacks Investment Research
LMT Stock’s Liquidity
The company’s current ratio is 1.14 compared with the industry’s average of 1.12. The ratio of more than one suggests a healthy liquidity position where the business can meet its immediate financial obligations without selling long-term assets.
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 1.47X, a discount to the industry’s average of 2.54X. This suggests that investors would be paying a lower price relative to the company’s expected sales growth compared with its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin continues to secure strong demand across its core defense programs, providing long-term revenue visibility and reinforcing its substantial backlog. Recent achievements, including expanded Aegis training support, investment in advanced missile production capabilities, and delivery of a next-generation Aegis software baseline, strengthen the company's position in defense modernization while creating recurring opportunities for upgrades, maintenance, and lifecycle support.
Considering its financial pressures and current price performance, new investors should wait and watch for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s earnings growth outlook and strong liquidity.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.