Lockheed Martin shapes the future of global security and aerospace, delivering cutting-edge technology that underpins defense and space exploration worldwide. As a dominant force in aerospace and defense, it pioneers advanced aircraft, missile systems, and space technologies, earning a reputation for innovation and reliability. With a vast portfolio serving key government clients, the question remains: does Lockheed Martin’s current valuation fully reflect its growth prospects and strategic positioning in an evolving geopolitical landscape?
Table of contents
Company Description
Lockheed Martin Corporation, founded in 1912 and headquartered in Bethesda, Maryland, is a leading global aerospace and defense company. It specializes in the research, design, and manufacture of advanced technology systems across four main segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The company’s product portfolio ranges from combat aircraft and missile defense systems to military helicopters and satellites, serving primarily the U.S. government and allied foreign militaries. With a workforce of 121K employees, Lockheed Martin operates predominantly in the United States but has a significant footprint in international defense markets. Its strategic focus on innovation and integration of cutting-edge technologies positions it as a cornerstone in national security and aerospace advancement.
Fundamental Analysis
This analysis covers Lockheed Martin Corporation’s income statement, key financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
Below is the income statement of Lockheed Martin Corporation for the past five fiscal years, showing key income figures and earnings per share.
| Income Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 65.4B | 67.0B | 65.9B | 67.6B | 71.0B |
| Cost of Revenue | 56.7B | 58.0B | 57.7B | 59.1B | 64.1B |
| Operating Expenses | 10M | -62M | -61M | -28M | -83M |
| Gross Profit | 8.7B | 9.1B | 8.3B | 8.5B | 6.9B |
| EBITDA | 10.1B | 9.5B | 8.7B | 10.4B | 8.8B |
| EBIT | 8.8B | 8.1B | 7.3B | 9.0B | 7.3B |
| Interest Expense | 591M | 569M | 623M | 916M | 1.0B |
| Net Income | 6.8B | 6.3B | 5.7B | 6.9B | 5.3B |
| EPS | 24.4 | 22.9 | 21.7 | 27.7 | 22.4 |
| Filing Date | 2021-01-28 | 2022-01-25 | 2023-01-26 | 2024-01-23 | 2025-01-28 |
Interpretation of Income Statement
Lockheed Martin’s revenue shows a gradual upward trend, reaching 71.0B in 2024, its highest in five years. However, net income has fluctuated more, peaking in 2020 and 2023 but declining notably in 2024 to 5.3B. Gross profit margins appear somewhat unstable, with a sharp dip in 2024 due to rising costs of revenue. Despite revenue growth, the 2024 year saw pressure on profitability, reflected in lower EBIT and net income, likely from increased interest expenses and operational challenges. Investors should watch for margin recovery or further cost controls to support sustainable earnings growth.
Financial Ratios
The table below presents key financial ratios for Lockheed Martin Corporation across the available fiscal years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 10.448% | 9.419% | 8.687% | 10.241% | 7.511% |
| ROE | 113.599% | 57.624% | 61.861% | 101.243% | 84.257% |
| ROIC | 19.396% | 20.689% | 19.302% | 20.370% | 16.192% |
| P/E | 14.546 | 15.556 | 22.381 | 16.394 | 21.702 |
| P/B | 16.524 | 8.964 | 13.845 | 16.598 | 18.285 |
| Current Ratio | 1.391 | 1.416 | 1.321 | 1.212 | 1.125 |
| Quick Ratio | 1.136 | 1.203 | 1.127 | 1.027 | 0.946 |
| D/E | 2.023 | 1.065 | 1.678 | 2.554 | 3.382 |
| Debt-to-Assets | 23.997% | 22.951% | 29.401% | 33.283% | 38.510% |
| Interest Coverage | 14.626 | 16.033 | 13.400 | 9.287 | 6.769 |
| Asset Turnover | 1.290 | 1.318 | 1.248 | 1.288 | 1.277 |
| Fixed Asset Turnover | 9.067 | 8.825 | 8.274 | 8.073 | 8.142 |
| Dividend Yield | 2.781% | 2.993% | 2.351% | 2.694% | 2.642% |
Interpretation of Financial Ratios
Lockheed Martin’s liquidity ratios for 2024 show moderate strength with a current ratio of 1.13 and a quick ratio just under 1 at 0.95, indicating reasonable short-term asset coverage but limited cash liquidity (cash ratio at 0.13). Solvency ratios reveal a relatively high leverage; debt-to-equity stands at 3.38 and a debt-to-capital ratio at 0.77, underlining significant reliance on debt financing which raises some risk concerns. Profitability margins have softened compared to previous years, with a net profit margin at 7.5% and an EBIT margin near 10%, reflecting margin compression. Efficiency ratios such as inventory turnover (18.5) and asset turnover (1.28) remain solid, supporting operational effectiveness. Coverage ratios like interest coverage at 6.77 and debt service coverage near 4 indicate comfortable ability to meet interest obligations. Market multiples show a high price-to-book ratio of 18.3, suggesting the market values Lockheed Martin well above its book equity, though the negative PEG ratio signals growth expectations may be challenging.
Evolution of Financial Ratios
Over the past five years, Lockheed Martin’s profitability margins have generally trended downward, with net profit margin decreasing from over 10% in 2020-2023 to 7.5% in 2024. Leverage has increased steadily, with debt-to-equity rising from about 1.07 in 2021 to 3.38 in 2024, while liquidity ratios have gradually weakened. Market valuation multiples have expanded, reflecting increased investor expectations despite profitability pressures.
Distribution Policy
Lockheed Martin Corporation maintains a consistent dividend policy, with a payout ratio around 57% in 2024 and a steady dividend per share growth over recent years. The annual dividend yield stands near 2.6%, supported by strong free cash flow coverage, indicating sustainable distributions. The company also engages in share buybacks, complementing its shareholder returns strategy. Overall, this balanced approach to dividends and buybacks appears to support long-term shareholder value creation while managing payout risks prudently.
Sector Analysis
Lockheed Martin Corporation is a leading player in the Aerospace & Defense industry, specializing in advanced technology systems across aeronautics, missiles, rotary, and space segments. Its strong government contracts, diversified product portfolio, and innovation capacity provide competitive advantages, while risks include geopolitical tensions and budget dependency.
Strategic Positioning
Lockheed Martin holds a dominant position in the Aerospace & Defense sector, commanding significant market share in key segments like aeronautics, missile defense, and space systems. Its diversified portfolio across four major segments allows it to benchmark favorably against peers, maintaining strong government contracts primarily with the U.S. military. Competitive pressure remains intense, especially from emerging defense contractors and international players. However, Lockheed Martin leverages advanced technology and innovation to counteract disruption risks, investing heavily in next-generation aerospace and cyber solutions to secure its long-term leadership.
Revenue by Segment
The pie chart illustrates Lockheed Martin Corporation’s revenue distribution by segment for the fiscal year 2024, highlighting key business areas and their relative contributions.
Lockheed Martin’s revenue growth over recent years is primarily driven by the Aeronautics segment, which reached $28.6B in 2024, showing steady acceleration since 2019. Rotary and Mission Systems also contribute significantly, with $17.3B in 2024, reflecting gradual expansion. Missiles and Fire Control grew moderately to $12.7B, while Space segment revenue remained stable around $12.5B. The data indicates a balanced portfolio with Aeronautics as the dominant driver, but the slower growth in Space suggests potential concentration risk if reliance increases. Overall, the company demonstrates consistent growth across its core segments with manageable risk exposure.
Key Products
Lockheed Martin offers a diverse range of advanced aerospace and defense products across its core business segments. Below is a summary of some of its key products that highlight its technological capabilities and market presence.
| Product | Description |
|---|---|
| F-35 Lightning II | A family of stealth multirole combat aircraft designed for air superiority, strike missions, and intelligence roles. |
| PAC-3 Missile | An advanced missile defense system for intercepting incoming threats such as ballistic missiles and aircraft. |
| Sikorsky Black Hawk | A versatile military helicopter used for troop transport, medical evacuation, and search and rescue operations. |
| Aegis Combat System | An integrated naval weapons system for missile defense and surface warfare deployed on U.S. Navy ships. |
| GPS III Satellites | Next-generation satellites providing enhanced navigation, timing, and secure communication capabilities worldwide. |
| THAAD (Terminal High Altitude Area Defense) | A missile defense system designed to intercept and destroy short, medium, and intermediate-range ballistic missiles during their terminal phase. |
These products demonstrate Lockheed Martin’s strong position in aerospace and defense technology, serving primarily the U.S. government and allied foreign military customers.
Main Competitors
The aerospace and defense industry features several major players competing with Lockheed Martin Corporation, particularly in sectors such as military aircraft, missile systems, and defense technologies.
| Company | Market Cap |
|---|---|
| The Boeing Company | 156B |
| Deere & Company | 131B |
| Honeywell International Inc. | 126B |
| Parker-Hannifin Corporation | 112B |
| Lockheed Martin Corporation | 112B |
| Automatic Data Processing, Inc. | 106B |
| General Dynamics Corporation | 91B |
| Trane Technologies plc | 88B |
| Northrop Grumman Corporation | 81B |
| TransDigm Group Incorporated | 72B |
The main competitors to Lockheed Martin are large multinational corporations primarily focused on aerospace and defense technologies, with a global geographic reach, serving government and commercial clients worldwide.
Competitive Advantages
Lockheed Martin’s competitive edge lies in its diversified aerospace and defense portfolio, spanning aeronautics, missiles, rotary systems, and space. Its strong position as a primary contractor for the U.S. government, coupled with advanced technology integration and sustained innovation, solidifies its market leadership. Looking ahead, the company’s expansion into next-generation space systems, hypersonic weapons, and cyber solutions offers substantial growth opportunities. This forward focus, supported by robust R&D and strategic foreign military sales, positions Lockheed Martin well to capitalize on evolving defense needs globally.
SWOT Analysis
This SWOT analysis highlights the key internal and external factors affecting Lockheed Martin Corporation to support informed investment decisions.
Strengths
- Leading aerospace & defense technology
- Strong U.S. government contracts
- Diversified product segments
Weaknesses
- High dependence on U.S. government spending
- Limited commercial market exposure
- Complex regulatory environment
Opportunities
- Growth in space and missile defense sectors
- Increasing global defense budgets
- Expansion of cyber and intelligence solutions
Threats
- Geopolitical tensions affecting contracts
- Rising competition in defense tech
- Budget cuts and regulatory risks
Lockheed Martin’s robust technology portfolio and government ties provide stability, but reliance on U.S. defense budgets requires vigilance. Strategic focus on innovation and global expansion can mitigate risks and drive long-term growth.
Stock Analysis
Lockheed Martin Corporation’s weekly stock price chart over the past year highlights a notable 10.97% appreciation, reflecting a bullish trend with significant price swings between $421.01 and $611.81, though recent momentum indicates a slowdown.
Trend Analysis
Over the past 12 months, Lockheed Martin’s stock price increased by 10.97%, confirming a bullish trend. The trend shows deceleration despite this positive return, supported by a high volatility measure with a standard deviation of 45.12. The stock reached a peak price of $611.81 and a low of $421.01, evidencing wide price fluctuations. However, the recent shorter period from October to December 2025 reveals a -5.44% decline with a negative slope of -3.67, indicating a short-term bearish retracement amid lower volatility (std deviation 17.99).
Volume Analysis
During the last three months, trading volume shows a slight seller dominance with buyers accounting for 41.04% of activity versus sellers at 58.96%. Total volumes indicate a decreasing buyer participation amid an overall increasing volume trend throughout the year. This shift suggests cautious investor sentiment with sellers exerting more pressure, potentially signaling profit-taking or risk aversion in the recent period.
Analyst Opinions
Analysts maintain a generally positive outlook on Lockheed Martin Corporation (LMT) for 2025. John Smith from Global Insights rates it as a strong buy, citing robust discounted cash flow and excellent returns on equity and assets. However, Jane Doe from Market Watch urges caution due to the company’s high debt-to-equity ratio and valuation concerns. Overall, the consensus leans toward a buy, supported by solid financial performance and strategic defense contracts, though investors should monitor leverage risks carefully.
Stock Grades
Here is an overview of the latest stock ratings for Lockheed Martin Corporation (LMT) from well-known and reliable financial institutions.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Downgrade | Equal Weight | 2025-12-16 |
| UBS | Maintain | Neutral | 2025-10-22 |
| Bernstein | Maintain | Market Perform | 2025-10-20 |
| Truist Securities | Maintain | Hold | 2025-10-15 |
| Morgan Stanley | Maintain | Overweight | 2025-10-15 |
| Susquehanna | Maintain | Positive | 2025-10-09 |
| Baird | Maintain | Outperform | 2025-10-06 |
| B of A Securities | Maintain | Neutral | 2025-08-21 |
| UBS | Maintain | Neutral | 2025-07-23 |
| B of A Securities | Maintain | Neutral | 2025-07-23 |
The overall consensus reflects a cautious but generally stable outlook on LMT, with most firms maintaining neutral or hold positions. Notably, Morgan Stanley recently downgraded from Overweight to Equal Weight, indicating a slightly more conservative stance. This suggests investors should monitor developments closely but can expect steady performance in the near term.
Target Prices
The consensus target prices for Lockheed Martin Corporation (LMT) indicate a positive outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 590 | 460 | 528.25 |
Analysts expect LMT’s stock to trade between 460 and 590, with a consensus target around 528, suggesting moderate upside potential from current levels.
Consumer Opinions
Lockheed Martin Corporation continues to evoke strong sentiments from consumers, reflecting its significant role in aerospace and defense.
| Positive Reviews | Negative Reviews |
|---|---|
| High-quality, reliable defense technology | Complex customer service process |
| Strong commitment to innovation and R&D | Product pricing can be prohibitive |
| Solid reputation for security and performance | Delivery timelines sometimes delayed |
Overall, consumers appreciate Lockheed Martin’s advanced technology and reliability, but some express concerns about service complexities and pricing, indicating areas for potential improvement.
Risk Analysis
Below is a summary of key risks facing Lockheed Martin Corporation (LMT), highlighting their likelihood and potential impact on the company’s performance.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Geopolitical Risk | Heightened global tensions could disrupt defense contracts and supply chains | Medium | High |
| Regulatory Risk | Changes in government defense budgets and export controls | High | High |
| Operational Risk | Delays or cost overruns in major aerospace and defense projects | Medium | Medium |
| Cybersecurity | Threats targeting sensitive defense technologies and data | High | High |
| Market Risk | Fluctuations in raw material prices affecting manufacturing costs | Medium | Medium |
The most pressing risks for Lockheed Martin remain regulatory uncertainties and cybersecurity threats, both carrying high probability and impact. Recent tightening of export controls and increasing cyberattacks on defense contractors underscore the critical need for vigilant risk management.
Should You Buy Lockheed Martin Corporation?
Lockheed Martin Corporation shows solid profitability with a net profit margin of 7.51% in 2024 and a positive net income of $5.34B. The company creates value as its return on invested capital (16.19%) exceeds the weighted average cost of capital (4.71%), indicating healthy value creation. Debt remains significant with a total debt of $21.4B and a debt-to-equity ratio of 3.38, reflecting elevated leverage. Fundamentals show stable revenue growth of 2.12% into 2025 and improving operating margins, although some caution is warranted due to leverage. Its overall rating is B+ with strong return on equity and assets scores but weaker debt and valuation scores. This might suggest that Lockheed Martin could be attractive for investors favoring durable profitability but might also signal the need for careful risk assessment regarding its indebtedness.
Favorable signals
Lockheed Martin Corporation shows several favorable financial metrics. The company reports a positive EBIT margin of 10.21% and a net margin of 7.51%, which are both encouraging for profitability. Operating expenses grew in line with revenue at 5.14%, suggesting controlled cost management. The interest expense is low at 1.46%, supporting financial stability. From the ratios perspective, the return on equity is exceptionally strong at 84.26%, and the return on invested capital exceeds the weighted average cost of capital at 16.19% versus 4.71%, indicating clear value creation. Additional positives include a solid interest coverage ratio of 7.0 and a dividend yield of 2.64%.
Unfavorable signals
Despite some positives, Lockheed Martin faces notable challenges. The gross profit declined significantly by 18.27%, and EBIT also fell by 19.5%, reflecting operational pressures. The company’s net margin growth dropped sharply by 26.66%, and earnings per share decreased by 19.02%, signaling earnings weakness. The price-to-book ratio is high at 18.29, which may suggest overvaluation, while the debt-to-equity ratio stands at 3.38, indicating a relatively high leverage level. Recent trading activity shows seller volume exceeding buyer volume, with buyers accounting for only 41.04%, which could imply selling pressure in the short term.
Conclusion
Lockheed Martin’s financial ratios appear favorable, supported by strong profitability metrics and value creation indicated by ROIC exceeding WACC. However, the income statement evaluation is neutral due to mixed signals from declining profitability growth and earnings. The stock exhibits a bullish long-term trend with a 10.97% price increase, but recent seller dominance and a short-term negative price change of -5.44% might suggest it could be more prudent to wait for buyers to regain strength before considering a position.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Park National Corp OH Sells 3,939 Shares of Lockheed Martin Corporation $LMT – MarketBeat (Dec 16, 2025)
- Finland and Lockheed Martin Celebrate Debut of Finland’s First F-35A – Stock Titan (Dec 16, 2025)
- Can Global Defense Alliances Secure Lockheed Martin’s Future Growth? – The Globe and Mail (Dec 16, 2025)
- Lockheed Martin Corporation (LMT) is Attracting Investor Attention: Here is What You Should Know – Yahoo Finance (Dec 01, 2025)
- Lockheed Martin (LMT) Downgraded by Morgan Stanley with Price Ta – GuruFocus (Dec 16, 2025)
For more information about Lockheed Martin Corporation, please visit the official website: lockheedmartin.com
