LMT Stock Risk & Deep Value Analysis
Lockheed Martin Corp
DVR Score
out of 10
What You Need to Know About LMT Stock
We analyzed Lockheed Martin Corp using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran LMT through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Conservative. Here's what we found.
LMT Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk is that government budget constraints or changes in defense priorities could lead to reduced order volumes or cancellation of key programs, impacting LMT's long-term revenue visibility and growth rates, particularly if geopolitical tensions unexpectedly decrease.
Risk Matrix
Overall
Conservative
Financial
Low
Market
Low
Competitive
Low
Execution
Medium
Regulatory
Medium
Upcoming Risk Events
- 📅
Potential delays or cost overruns on major government contracts
- 📅
Significant cuts to U.S. or international defense budgets
- 📅
Unexpected shifts in global geopolitical landscape leading to de-escalation
When to Reconsider
- 🚪
Sustained decline in record backlog for two consecutive quarters.
- 🚪
Significant government policy shift leading to decreased defense spending.
- 🚪
Loss of a major, flagship program (e.g., F-35 contract modifications adverse to LMT).
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Investment Thesis
Lockheed Martin presents a stable investment opportunity for long-term investors seeking consistent income and exposure to the robust defense sector. Benefiting from increased global defense spending, its immense backlog, and strategic positioning across critical programs, LMT offers reliable returns and a strong dividend, albeit with minimal potential for 10x growth due to its mature size and market dominance.
Is LMT Stock Undervalued?
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LMT Price Targets & Strategy
12-Month Target
$665.65
Bull Case
$700.00
Bear Case
$580.00
Valuation Basis
Based on median analyst price target reflecting approximately 22.5x estimated FY26 EPS of $29.60.
Entry Strategy
Dollar-cost average on dips to strong support zones, particularly near the $590-$600 range, which aligns with recent consolidation levels. Consider accumulating below current price.
Exit Strategy
Consider taking profits at the $680-$700 range. Implement a stop-loss order below key support levels, such as $580, to protect against significant downside risk.
Portfolio Allocation
2-4% for conservative to moderate risk tolerance, primarily for dividend income and portfolio stability. Not suitable for aggressive growth portfolios.
Price Targets & Strategy
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Is LMT Financially Healthy?
Valuation
P/E Ratio
28.35
Forward P/E
21.47
EV/EBITDA
75.89
PEG Ratio
2.45
Price/Book
2.55
Price/Sales
1.81
Profitability
Gross Margin
10.24%
Operating Margin
10.30%
Net Margin
6.69%
Return on Equity
80.53%
Revenue Growth
5.64%
EPS
$21.49
Balance Sheet
Current Ratio
1.09
Quick Ratio
0.94
Debt/Equity
3.23
Total Debt
$20.52B
Cash & Equivalents
$4.10B
Cash Flow
Operating Cash Flow
$3.22B
Free Cash Flow
$2.89B
EBITDA
$1.90B
Other
Beta (Volatility)
0.24
Dividend Yield
2.23%
Does LMT Have a Competitive Moat?
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🏰 Wide
Moat Trend
Stable
Moat Sources
4 Identified
Lockheed Martin's moat is highly durable, rooted in its critical role in national security, the extremely high barriers to entry in defense manufacturing, long-term government contracts, and continuous investment in advanced, proprietary technology.
Moat Erosion Risks
- •Significant and unexpected shifts in geopolitical strategies or alliances.
- •Aggressive push by governments to develop in-house capabilities or diversify suppliers.
- •Emergence of truly disruptive technologies from non-traditional defense players that could bypass current complex systems.
LMT Competitive Moat Analysis
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LMT Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (Limited public retail investor interest compared to high-growth tech stocks, focus primarily on stability and dividends).
Institutional Sentiment
Neutral (Reflected by a mix of 'Hold' and 'Neutral' ratings from major analysts like Jefferies and Citi, with modest price target increases).
Insider Activity (Form 4)
Normal insider activity for a large, mature corporation, no specific Form 4 filings indicating unusual buying or selling trends were detailed in the provided research.
Options Flow
Normal options activity for a large-cap defense stock, without any specific indications of unusual institutional positioning in the provided data.
Earnings Intelligence
Next Earnings
2026-04-23
Surprise Probability
Medium
Historical Earnings Pattern
Lockheed Martin typically meets or slightly exceeds consensus estimates, with stock price reactions usually stable, moving incrementally on significant guidance changes or major contract announcements rather than dramatic post-earnings volatility.
Key Metrics to Watch
Competitive Position
Top Competitor
NOC
Market Share Trend
Stable
Valuation vs Peers
LMT typically trades at a slight premium or in line with its direct defense contractor peers (e.g., Northrop Grumman, Raytheon Technologies) due to its market leadership, diversified portfolio, and consistent performance.
Competitive Advantages
- •Proprietary technology and extensive R&D capabilities
- •Deeply entrenched relationships and prime contractor status with government agencies
- •Unparalleled scale and integration across multiple defense domains (aeronautics, missiles, space)
Market Intelligence
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What Could Drive LMT Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Release (April 23, 2026)
- •Continued progress on PAC-3 MSE production ramp-up
- •Updates on government defense budget allocations
Medium-Term (6-18 months)
- •Successful integration of Lockheed Martin Ventures portfolio companies into core operations
- •Key program milestones for F-35 deliveries and international sales
- •Advancements in space exploration programs (e.g., Artemis II crewed flight)
Long-Term (18+ months)
- •Development and adoption of next-generation defense technologies (e.g., hypersonics, AI-driven systems)
- •Expansion into new global defense markets with strategic allies
- •Continued tailwinds from rising global geopolitical tensions and increased defense spending
Catalysts & Growth Drivers
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What's the Bull Case for LMT?
- ✓
Consistency in dividend growth and share buyback programs.
- ✓
Success in integrating technologies from Lockheed Martin Ventures.
- ✓
Any signs of accelerating organic revenue growth beyond historical rates.
Bull Case Analysis
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Competing with LMT
See how Lockheed Martin Corp compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Lockheed Martin Corp LMT | $142.2B | 0.4 | 28.3 | $76.0B | 6.7% | 5.6% | |
RTX Corp RTX | — | 0.1 | 5.0 | $88.6B | 7.6% | 0.0% | Compare → |
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How Lockheed Martin Corp Makes Money
Lockheed Martin is the world's largest defense contractor, generating revenue by designing, developing, manufacturing, and sustaining advanced technology systems, products, and services for global defense and space applications. Its primary customers are the U.S. Department of Defense and other U.S. government agencies, along with international military allies. The business model is characterized by long-term contracts, significant R&D investments, and a focus on high-margin, technologically complex aerospace, defense, and security platforms.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Lockheed Martin Corp (LMT)?
As of April 14, 2026, Lockheed Martin Corp has a DVR Score of 0.4 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Lockheed Martin Corp?
Lockheed Martin Corp's market capitalization is approximately $142.2B..
What is the risk level for LMT stock?
Our analysis rates Lockheed Martin Corp's overall risk as Conservative. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of LMT?
Lockheed Martin Corp currently has a price-to-earnings (P/E) ratio of 28.3. This is in line with broader market averages.
Does Lockheed Martin Corp pay a dividend?
Yes, Lockheed Martin Corp pays a dividend with a current yield of approximately 2.23%.
Is Lockheed Martin Corp's revenue growing?
Lockheed Martin Corp has reported revenue growth of 5.6%. The company is growing at a moderate pace.
Is LMT stock profitable?
Lockheed Martin Corp has a profit margin of 6.7%. The company is profitable but margins are modest.
How often is the LMT DVR analysis updated?
Our AI-powered analysis of Lockheed Martin Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 14, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for LMT (Lockheed Martin Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.