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Lockheed Martin Stock Falls 3.8% in 3 Months: How to Play?
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Key Takeaways
Lockheed Martin is expanding Black Hawk production and munitions capacity to meet rising defense demand.
LMT is investing $8-9 billion across more than 20 U.S. sites to scale munitions production.
LMT faces program execution risks, while its 70.08% debt-to-capital ratio remains above the industry average.
Lockheed Martin’s (LMT - Free Report) shares have lost 3.8% in the past three months compared with the Zacks Aerospace-Defense industry’s decline of 7.7%. The company’s record backlog, expanding munitions capacity and alignment with U.S. and allied defense priorities support durable growth.
Image Source: Zacks Investment Research
Shares of other defense stocks, such as RTX Corporation (RTX - Free Report) and Boeing (BA - Free Report) , have also underperformed the industry during the three-month period. RTX and Boeing have declined 8% and 8.8%, respectively. The outlook for Boeing’s defense and space business remains encouraging, as it is one of the largest defense contractors globally and a prominent integrator in the International Space Station. Meanwhile, RTX’s defense business remains well-positioned, backed by strong bookings from the Pentagon and foreign allies. It expects defense sales to grow at a high-single-digit rate in 2026, supported by backlog conversion, higher output and favorable program mix.
Considering Lockheed Martin’s current price performance, investors might be left wondering what the next step would be. Let's examine the factors and assess the stock's investment prospects to make an informed decision.
Tailwinds for LMT Stock
On Sept. 30, 2026, Sikorsky, a Lockheed Martin company, reached a Novel Production Agreement with the U.S. Army for Black Hawk helicopters. The agreement initially covers 16 Black Hawk aircraft, with deliveries beginning in 2028, and is designed to give the Army flexibility to add aircraft as U.S. requirements and allied Foreign Military Sales demand develop. The Black Hawk already has a large installed base, with more than 5,000 helicopters delivered to over 36 allied nations, making the agreement particularly important for sustaining and expanding the platform's global presence.
On Sept. 29, 2026, Avio USA broke ground on its first U.S. solid rocket motor manufacturing facility in Hurt, Virginia. The approximately 900,000-square-foot facility is expected to produce thousands of solid rocket motors annually for U.S. tactical missile programs. For Lockheed Martin, the facility could strengthen the company's ability to secure a reliable supply of solid rocket motors as demand for missiles and munitions increases.
In September 2026, Lockheed Martin highlighted a new approach to strengthening its defense supply chain as it works to rapidly expand munitions production. The company said it is investing $8-9 billion to scale munitions production across more than 20 U.S. sites, including expanded manufacturing capacity, new facilities, advanced technologies and workforce growth.
Lockheed Martin is also using longer-term, commercial-style agreements with the Department of War for programs including PAC-3 MSE, THAAD, PrSM and JATM, giving the company and its suppliers greater visibility into future demand. The company said these partnerships are already producing measurable improvements, including a more than 130% increase in thermal-battery production capacity over the next six months, a 21% reduction in the cost of scaling that capacity, faster missile-canister sealant curing and the removal of production bottlenecks.
Challenges for LMT Stock
Lockheed remains exposed to cost-estimate and schedule risks on complex programs, especially under fixed-price arrangements. While second-quarter 2026 benefited from the absence of $1.6 billion of prior-year reach-forward losses, execution challenges persisted. In Aeronautics, F-16 and C-130 production issues, lower initial profit booking rates on new contracts and $160 million of lower net favorable profit adjustments weighed on profitability. RMS recognized unfavorable adjustments of $65 million on Heavy Lift and $50 million on Seahawk programs.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates year-over-year growth of 31.7%. LMT’s long-term (three to five years) earnings growth rate is 15.13%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RTX’s 2026 EPS indicates year-over-year growth of 14.8%. RTX’s long-term earnings growth rate is 10.76%. The Zacks Consensus Estimate for Boeing’s 2026 EPS indicates year-over-year growth of 91.5%. BA’s long-term earnings growth rate is 12%.
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 8.85%.
Image Source: Zacks Investment Research
LMT’s Debt Position
Currently, the company’s total debt to capital is 70.08%, higher than the industry’s average of 46.7%.
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 1.39X, a discount to the industry’s average of 2.16X. This suggests that the stock is trading at a lower valuation relative to its projected sales growth than its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin is strengthening its defense portfolio through new Black Hawk production agreements, expanded solid rocket motor capacity and a more resilient munitions supply chain. These initiatives are designed to support growing U.S. and allied demand, improve production efficiency, reduce supply-chain bottlenecks and accelerate delivery of key defense systems.
Considering its financial pressures and current debt levels, new investors should wait and watch for a better entry point. Investors who already own this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s earnings growth outlook.
View the Zacks #1 Rank List
Image: Bigstock
Lockheed Martin Stock Falls 3.8% in 3 Months: How to Play?
Key Takeaways
Lockheed Martin’s (LMT - Free Report) shares have lost 3.8% in the past three months compared with the Zacks Aerospace-Defense industry’s decline of 7.7%. The company’s record backlog, expanding munitions capacity and alignment with U.S. and allied defense priorities support durable growth.
Image Source: Zacks Investment Research
Shares of other defense stocks, such as RTX Corporation (RTX - Free Report) and Boeing (BA - Free Report) , have also underperformed the industry during the three-month period. RTX and Boeing have declined 8% and 8.8%, respectively. The outlook for Boeing’s defense and space business remains encouraging, as it is one of the largest defense contractors globally and a prominent integrator in the International Space Station. Meanwhile, RTX’s defense business remains well-positioned, backed by strong bookings from the Pentagon and foreign allies. It expects defense sales to grow at a high-single-digit rate in 2026, supported by backlog conversion, higher output and favorable program mix.
Considering Lockheed Martin’s current price performance, investors might be left wondering what the next step would be. Let's examine the factors and assess the stock's investment prospects to make an informed decision.
Tailwinds for LMT Stock
On Sept. 30, 2026, Sikorsky, a Lockheed Martin company, reached a Novel Production Agreement with the U.S. Army for Black Hawk helicopters. The agreement initially covers 16 Black Hawk aircraft, with deliveries beginning in 2028, and is designed to give the Army flexibility to add aircraft as U.S. requirements and allied Foreign Military Sales demand develop. The Black Hawk already has a large installed base, with more than 5,000 helicopters delivered to over 36 allied nations, making the agreement particularly important for sustaining and expanding the platform's global presence.
On Sept. 29, 2026, Avio USA broke ground on its first U.S. solid rocket motor manufacturing facility in Hurt, Virginia. The approximately 900,000-square-foot facility is expected to produce thousands of solid rocket motors annually for U.S. tactical missile programs. For Lockheed Martin, the facility could strengthen the company's ability to secure a reliable supply of solid rocket motors as demand for missiles and munitions increases.
In September 2026, Lockheed Martin highlighted a new approach to strengthening its defense supply chain as it works to rapidly expand munitions production. The company said it is investing $8-9 billion to scale munitions production across more than 20 U.S. sites, including expanded manufacturing capacity, new facilities, advanced technologies and workforce growth.
Lockheed Martin is also using longer-term, commercial-style agreements with the Department of War for programs including PAC-3 MSE, THAAD, PrSM and JATM, giving the company and its suppliers greater visibility into future demand. The company said these partnerships are already producing measurable improvements, including a more than 130% increase in thermal-battery production capacity over the next six months, a 21% reduction in the cost of scaling that capacity, faster missile-canister sealant curing and the removal of production bottlenecks.
Challenges for LMT Stock
Lockheed remains exposed to cost-estimate and schedule risks on complex programs, especially under fixed-price arrangements. While second-quarter 2026 benefited from the absence of $1.6 billion of prior-year reach-forward losses, execution challenges persisted. In Aeronautics, F-16 and C-130 production issues, lower initial profit booking rates on new contracts and $160 million of lower net favorable profit adjustments weighed on profitability. RMS recognized unfavorable adjustments of $65 million on Heavy Lift and $50 million on Seahawk programs.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates year-over-year growth of 31.7%. LMT’s long-term (three to five years) earnings growth rate is 15.13%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RTX’s 2026 EPS indicates year-over-year growth of 14.8%. RTX’s long-term earnings growth rate is 10.76%. The Zacks Consensus Estimate for Boeing’s 2026 EPS indicates year-over-year growth of 91.5%. BA’s long-term earnings growth rate is 12%.
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 8.85%.
Image Source: Zacks Investment Research
LMT’s Debt Position
Currently, the company’s total debt to capital is 70.08%, higher than the industry’s average of 46.7%.
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 1.39X, a discount to the industry’s average of 2.16X. This suggests that the stock is trading at a lower valuation relative to its projected sales growth than its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do Now?
Lockheed Martin is strengthening its defense portfolio through new Black Hawk production agreements, expanded solid rocket motor capacity and a more resilient munitions supply chain. These initiatives are designed to support growing U.S. and allied demand, improve production efficiency, reduce supply-chain bottlenecks and accelerate delivery of key defense systems.
Considering its financial pressures and current debt levels, new investors should wait and watch for a better entry point. Investors who already own this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s earnings growth outlook.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.