Lockheed Martin Corp. LMT faces rising stress from Wall Road after delivering blended second-quarter outcomes and absorbing practically $1.6 billion in fees throughout key segments.
Goldman Sachs analyst Noah Poponak reiterated a Promote ranking on Lockheed Martin and lowered his 12-month value forecast to $398 from $406. He pointed to ongoing issues that would damage earnings, scale back money stream, and make future earnings much less predictable.
Poponak famous that the newest fees in categorised Aeronautics and helicopter applications inside Rotary and Mission Methods (RMS) scale back section margin expectations and will drag free money stream decrease past 2025.
Additionally Learn: Lockheed Martin Confirms Talks With US Over Trump’s $175 Billion ‘Golden Dome’ Missile Protect — CEO James Taiclet Says No Contracts But, LMT Is ‘All In’
He additionally highlighted dangers tied to NGAD program losses and uncertainty round future F-35 funding, each of which threaten a considerable share of Lockheed’s earnings base.
Regardless of continued demand in missile protection and different high-profile applications, Poponak believes Lockheed is getting into a more difficult part. He reduce his 2025-2028 EPS estimates and lowered his 12-month value goal to $398 from $406, whereas sustaining a goal P/E a number of of 0.81x relative to the S&P 500.
Different Analysts Additionally Turned Cautious Following The Outcomes:
- Susquehanna’s Charles Minervino maintained a Constructive ranking and lowered his value forecast from $550 to $490.
- RBC Capital’s Ken Herbert stored a Sector Carry out ranking and reduce his forecast from $480 to $440.
- Truist’s Michael Ciarmoli downgraded the inventory from Purchase to Maintain and lowered his forecast from $554 to $440.
- Baird’s Peter Arment maintained an Outperform ranking whereas trimming his forecast from $540 to $500.
- JP Morgan’s Seth Seifman maintained an Obese ranking whereas reducing the value forecast from $520 to $465.
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Earnings Recap: Margins Hit by Legacy Program Fees
Lockheed reported web gross sales of $18.16 billion, barely lacking estimates, whereas adjusted EPS of $7.29 beat the $6.63 consensus. Nonetheless, GAAP earnings fell to $1.46 per share, down sharply from $6.63 a yr in the past as a consequence of fees associated to price overruns and schedule slippage in legacy applications.
Working margin collapsed to 4.1% from 11.9%, and free money stream turned detrimental at $150 million. The corporate reaffirmed its 2025 gross sales steerage of $73.75 billion to $74.75 billion and free money stream outlook of $6.6 billion to $6.8 billion, however lowered its GAAP EPS forecast to $21.70-$22.00, from $27+ beforehand.
IRS Dispute and ‘Golden Dome’ Talks
Including to the stress, Lockheed’s CFO reportedly confirmed that the IRS is in search of $4.6 billion in further revenue taxes. In line with Reuters, the corporate is difficult the declare by means of the IRS Unbiased Workplace of Appeals and is ready to pursue judicial motion if vital.
In the meantime, CEO James Taiclet confirmed discussions with U.S. officers over former President Trump’s proposed $175 billion ‘Golden Dome’ missile protect. Whereas no contracts have been awarded, Taiclet mentioned Lockheed is “all in” on the idea.
Lockheed Martin reached a 52-week excessive of $618.95 on Oct. 21, 2024, and a 52-week low of $410.11 on July 22, 2025, the day after it reported second-quarter outcomes, marking an approximate 34% decline from its peak.
Worth Motion: Ultimately verify Wednesday, LMT shares had been buying and selling increased by 2.70% to $421.82.
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