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Should LMT Shares Be Added to Your Portfolio Ahead of Q3 Earnings?
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Key Takeaways
Lockheed Martin is expected to post Q3 2026 earnings of $7.48 per share and revenues of $20.35 billion.
Record backlog, rising missile defense demand and higher F-35 production are expected to drive growth.
ULA-related earnings pressure, high debt and program execution risks could constrain profitability.
Lockheed Martin (LMT - Free Report) is expected to report third-quarter 2026 results on Oct. 22, before market open.
The Zacks Consensus Estimate for earnings is pegged at $7.48 per share, indicating year-over-year growth of 7.6%. The Zacks Consensus Estimate for revenues is pinned at $20.35 billion, indicating growth of 9.4% from the year-ago reported figure.
Image Source: Zacks Investment Research
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
What Our Quantitative Model Predicts
Our proven model predicts an earnings beat for Lockheed Martin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here as you will see below.
Earnings ESP: The company’s Earnings ESP is +0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Some other industry stocks with a combination of factors indicating an earnings beat are RTX Corporation (RTX - Free Report) and Howmet Aerospace (HWM - Free Report) . RTX and Howmet Aerospace have an Earnings ESP of +0.15% and +0.21%, respectively. RTX has a Zacks Rank #2 and HWM sports a Zacks Rank #1 at present.
Factors That Might Have Impacted LMT’s Q3 Performance
Lockheed Martin’s record order backlog provides a solid foundation for revenue growth, supported by demand for missile defense systems, precision munitions, fighter aircraft and space-based defense technologies. The company’s expanding production agreements for THAAD, PAC-3 and GMLRS, alongside new radar and strategic space awards, should support higher production volumes and revenue visibility.
Missiles and Fire Control is positioned to remain a major growth driver as production ramps up for PAC-3, THAAD and PrSM. Aeronautics should benefit from stronger F-35 production and sustainment activity, while Rotary and Mission Systems is expected to gain from new radar contracts and higher Sikorsky helicopter production. Space revenues should have been supported by the Next Generation Interceptor, Fleet Ballistic Missile and classified national security programs. Management expects growth to accelerate across all four business segments in the second half of 2026, providing a favorable backdrop for the third quarter.
The company’s third-quarter results are expected to benefit from continued U.S. government and allied support for defense spending — particularly in missile defense, air dominance and space systems.
Management highlighted progress in improving production efficiency through robotics, AI-enabled manufacturing and partnerships with suppliers and international allies. These initiatives could help the company meet rising customer demand, improve delivery schedules and support profitability.
The company’s Space business faces pressure from reduced equity earnings associated with United Launch Alliance (“ULA”) following the technical investigation into the Vulcan launch anomaly. Although higher volumes in strategic missile defense and national security programs are expected to support sales, weaker contributions from ULA could limit profit growth. This creates a potential headwind to consolidated earnings even if the segment continues to record higher revenues.
LMT Stock Price Performance
In the past three months, the stock has risen 3.7% against the industry’s decline of 11.5%.
Image Source: Zacks Investment Research
LMT Stock Trading at a Discount
Lockheed Martin is currently trading at a discount compared to its industry on a forward 12-month P/S basis.
Image Source: Zacks Investment Research
RTX and Howmet Aerospace are trading at a premium compared to its industry on a forward 12-month P/S basis.
LMT’s Debt Position
Currently, the company’s total debt to capital is 70.08%, higher than the industry’s average of 46.68%.
Image Source: Zacks Investment Research
Investment Thesis
Lockheed Martin is benefiting from a favorable macro backdrop of higher U.S. and allied defense spending, inventory replenishment and growing demand for missile defense, munitions, advanced aircraft and space systems. LMT’s portfolio is concentrated in areas receiving increasing funding and procurement priority, including munitions, integrated air and missile defense, hypersonics, space-based interceptors and counter-drone systems.
Lockheed Martin remains exposed to cost overruns and schedule delays on complex programs, particularly under fixed-price contracts. Production challenges, lower initial profitability on new contracts and unfavorable adjustments across several defense programs continue to pressure margins. Ongoing execution risks in classified and helicopter programs could lead to further charges if costs, project scope or delivery timelines deteriorate.
End Note
Lockheed Martin’s diversified defense offerings strengthen its competitive position in securing large-scale government contracts and sustaining robust future demand. Its presence across aerospace, space technologies and maritime defense provides multiple avenues for continued business expansion.
However, considering its high debt levels and execution risks, new investors should wait and look for a better entry point.
View the Zacks #1 Rank List
Image: Bigstock
Should LMT Shares Be Added to Your Portfolio Ahead of Q3 Earnings?
Key Takeaways
Lockheed Martin (LMT - Free Report) is expected to report third-quarter 2026 results on Oct. 22, before market open.
The Zacks Consensus Estimate for earnings is pegged at $7.48 per share, indicating year-over-year growth of 7.6%. The Zacks Consensus Estimate for revenues is pinned at $20.35 billion, indicating growth of 9.4% from the year-ago reported figure.
Image Source: Zacks Investment Research
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
What Our Quantitative Model Predicts
Our proven model predicts an earnings beat for Lockheed Martin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here as you will see below.
Earnings ESP: The company’s Earnings ESP is +0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Lockheed Martin carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.
Other Stocks Worth a Look
Some other industry stocks with a combination of factors indicating an earnings beat are RTX Corporation (RTX - Free Report) and Howmet Aerospace (HWM - Free Report) . RTX and Howmet Aerospace have an Earnings ESP of +0.15% and +0.21%, respectively. RTX has a Zacks Rank #2 and HWM sports a Zacks Rank #1 at present.
Factors That Might Have Impacted LMT’s Q3 Performance
Lockheed Martin’s record order backlog provides a solid foundation for revenue growth, supported by demand for missile defense systems, precision munitions, fighter aircraft and space-based defense technologies. The company’s expanding production agreements for THAAD, PAC-3 and GMLRS, alongside new radar and strategic space awards, should support higher production volumes and revenue visibility.
Missiles and Fire Control is positioned to remain a major growth driver as production ramps up for PAC-3, THAAD and PrSM. Aeronautics should benefit from stronger F-35 production and sustainment activity, while Rotary and Mission Systems is expected to gain from new radar contracts and higher Sikorsky helicopter production. Space revenues should have been supported by the Next Generation Interceptor, Fleet Ballistic Missile and classified national security programs. Management expects growth to accelerate across all four business segments in the second half of 2026, providing a favorable backdrop for the third quarter.
The company’s third-quarter results are expected to benefit from continued U.S. government and allied support for defense spending — particularly in missile defense, air dominance and space systems.
Management highlighted progress in improving production efficiency through robotics, AI-enabled manufacturing and partnerships with suppliers and international allies. These initiatives could help the company meet rising customer demand, improve delivery schedules and support profitability.
The company’s Space business faces pressure from reduced equity earnings associated with United Launch Alliance (“ULA”) following the technical investigation into the Vulcan launch anomaly. Although higher volumes in strategic missile defense and national security programs are expected to support sales, weaker contributions from ULA could limit profit growth. This creates a potential headwind to consolidated earnings even if the segment continues to record higher revenues.
LMT Stock Price Performance
In the past three months, the stock has risen 3.7% against the industry’s decline of 11.5%.
Image Source: Zacks Investment Research
LMT Stock Trading at a Discount
Lockheed Martin is currently trading at a discount compared to its industry on a forward 12-month P/S basis.
Image Source: Zacks Investment Research
RTX and Howmet Aerospace are trading at a premium compared to its industry on a forward 12-month P/S basis.
LMT’s Debt Position
Currently, the company’s total debt to capital is 70.08%, higher than the industry’s average of 46.68%.
Image Source: Zacks Investment Research
Investment Thesis
Lockheed Martin is benefiting from a favorable macro backdrop of higher U.S. and allied defense spending, inventory replenishment and growing demand for missile defense, munitions, advanced aircraft and space systems. LMT’s portfolio is concentrated in areas receiving increasing funding and procurement priority, including munitions, integrated air and missile defense, hypersonics, space-based interceptors and counter-drone systems.
Lockheed Martin remains exposed to cost overruns and schedule delays on complex programs, particularly under fixed-price contracts. Production challenges, lower initial profitability on new contracts and unfavorable adjustments across several defense programs continue to pressure margins. Ongoing execution risks in classified and helicopter programs could lead to further charges if costs, project scope or delivery timelines deteriorate.
End Note
Lockheed Martin’s diversified defense offerings strengthen its competitive position in securing large-scale government contracts and sustaining robust future demand. Its presence across aerospace, space technologies and maritime defense provides multiple avenues for continued business expansion.
However, considering its high debt levels and execution risks, new investors should wait and look for a better entry point.