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Is Lockheed Martin Entering a New Growth Cycle Through Missile Defense?
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Key Takeaways
Lockheed Martin's MFC sales rose 19% as PAC-3, THAAD and PrSM volumes increased.
THAAD helped drive Lockheed Martin's backlog to $230.4 billion by June 28, 2026.
MFC's 2026 sales outlook increased to $16.5-$16.9 billion on higher program volumes.
Lockheed Martin’s (LMT - Free Report) Missiles and Fire Control (“MFC”) segment is becoming an important contributor to the company’s current growth. Second-quarter 2026 MFC sales increased 19% year over year to $4.1 billion, while segment operating profit increased 24% to $594 million. The company attributed the sales increase primarily to higher volumes on the PAC-3, THAAD and PrSM programs.
THAAD is particularly important to Lockheed Martin’s backlog expansion. The company's backlog reached $230.4 billion as of June 28, 2026, marking an increase of $36.8 billion during the first six months of the year. Lockheed Martin said the increase was primarily driven by an undefinitized contractual action awarded for the THAAD program within MFC.
THAAD is therefore contributing to both current production and future revenue visibility. The program also sits alongside PAC-3 and PrSM, giving MFC several missile programs contributing to the segment's growth rather than relying on a single platform.
LMT increased its full-year 2026 outlook across all four business segments. For MFC, the company now expects 2026 sales of $16.5-$16.9 billion compared with its previous April outlook of $16.1-$16.9 billion. It expects MFC operating profit of $2.3 billion to $2.35 billion. The company said the higher sales outlook reflects higher volumes on PAC-3, THAAD and PrSM.
The broader portfolio also provides additional growth opportunities. Aeronautics sales are expected to benefit from higher F-35 production volume, while Space expects increased volume on the Next Generation Interceptor and Fleet Ballistic Missile programs. Rotary and Mission Systems is also expecting growth from a Sikorsky production ramp up and new radar awards.
Companies Benefiting From Missile & Defense Modernization
Along with LMT, few other companies are also positioned to benefit from the same trend, as discussed below:
RTX Corporation (RTX - Free Report) : RTX has exposure to missile defense through Raytheon, including systems and interceptors used across air and missile-defense programs. Its portfolio also spans sensors, radars and other defense technologies.
Northrop Grumman (NOC - Free Report) : Northrop Grumman participates in missile defense, space and strategic systems, giving it exposure to government demand for integrated defense and next-generation security capabilities.
LMT Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year improvement of 31.7% and 8.44%, respectively.
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 1.44X, a discount to the industry’s average of 2.27X.
Image Source: Zacks Investment Research
LMT Stock’s Price Performance
In the past three months, the company’s shares have risen 3.8% against the industry’s 8.8% decline.
View the Zacks #1 Rank List
Image: Bigstock
Is Lockheed Martin Entering a New Growth Cycle Through Missile Defense?
Key Takeaways
Lockheed Martin’s (LMT - Free Report) Missiles and Fire Control (“MFC”) segment is becoming an important contributor to the company’s current growth. Second-quarter 2026 MFC sales increased 19% year over year to $4.1 billion, while segment operating profit increased 24% to $594 million. The company attributed the sales increase primarily to higher volumes on the PAC-3, THAAD and PrSM programs.
THAAD is particularly important to Lockheed Martin’s backlog expansion. The company's backlog reached $230.4 billion as of June 28, 2026, marking an increase of $36.8 billion during the first six months of the year. Lockheed Martin said the increase was primarily driven by an undefinitized contractual action awarded for the THAAD program within MFC.
THAAD is therefore contributing to both current production and future revenue visibility. The program also sits alongside PAC-3 and PrSM, giving MFC several missile programs contributing to the segment's growth rather than relying on a single platform.
LMT increased its full-year 2026 outlook across all four business segments. For MFC, the company now expects 2026 sales of $16.5-$16.9 billion compared with its previous April outlook of $16.1-$16.9 billion. It expects MFC operating profit of $2.3 billion to $2.35 billion. The company said the higher sales outlook reflects higher volumes on PAC-3, THAAD and PrSM.
The broader portfolio also provides additional growth opportunities. Aeronautics sales are expected to benefit from higher F-35 production volume, while Space expects increased volume on the Next Generation Interceptor and Fleet Ballistic Missile programs. Rotary and Mission Systems is also expecting growth from a Sikorsky production ramp up and new radar awards.
Companies Benefiting From Missile & Defense Modernization
Along with LMT, few other companies are also positioned to benefit from the same trend, as discussed below:
RTX Corporation (RTX - Free Report) : RTX has exposure to missile defense through Raytheon, including systems and interceptors used across air and missile-defense programs. Its portfolio also spans sensors, radars and other defense technologies.
Northrop Grumman (NOC - Free Report) : Northrop Grumman participates in missile defense, space and strategic systems, giving it exposure to government demand for integrated defense and next-generation security capabilities.
LMT Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year improvement of 31.7% and 8.44%, respectively.
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 1.44X, a discount to the industry’s average of 2.27X.
Image Source: Zacks Investment Research
LMT Stock’s Price Performance
In the past three months, the company’s shares have risen 3.8% against the industry’s 8.8% decline.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.