Lockheed Martin (LMT) just laid out a fresh manufacturing push. A US$300 million expansion in Grand Prairie, Texas, plus 6,000 new US jobs, puts advanced munitions capacity squarely in focus for investors.
Recent trading suggests investors are warming to these updates. Lockheed Martin’s share price is up 3.61% over the past day and 4.61% over the past week, while a modest 30 day dip of 1.35% leaves the year to date share price return at 5.06%. Over a longer horizon, total shareholder return of 7.27% over one year and 60.85% over five years points to gains that long term holders have actually received once dividends are included.
Scan how other defense and industrial players are repositioning around munitions and advanced manufacturing by checking our curated list of 43 power grid technology and infrastructure stocks.
Lockheed Martin now trades about 19% below the average analyst price target and roughly one third below one fair value estimate. After this manufacturing push and dividend lift, is the market’s caution still warranted?Most Popular Narrative: 16% Undervalued
Against the last close at $522.23, the most followed narrative pegs Lockheed Martin’s fair value at about $624.95 using an 8.38% discount rate. This points to a material valuation gap that this latest manufacturing expansion feeds into.
A record backlog of about US$230b supported by a book to bill ratio of 3.2 to 1 and large multiyear awards such as the seven year US$35b THAAD contract and major radar and space orders points to a multi year period where new work converts into sales, earnings and free cash flow that are not yet fully reflected in reported results.
See why 301 investors see Lockheed Martin as 16% undervalued.
Result: Fair Value of $624.95 (UNDERVALUED)
Still, that upbeat Lockheed Martin story can crack if cost overruns on fixed price programs resurface, or if missile framework deals stall before becoming firm orders.
Find out about the key risks to this Lockheed Martin narrative.
Next Steps
Mixed messages or real opportunity? Move quickly, test both the bullish and cautious angles against your own risk tolerance, and weigh both sides with 5 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Lockheed Martin?
You have already done the work on Lockheed Martin, so do not stop short. Broaden your watchlist now and keep your options open across sectors and styles.
- Target potential mispricing by scanning a curated pool of quality opportunities using the 32 high quality undervalued stocks.
- Seek more dependable income streams by zeroing in on companies that resemble dividend fortresses through the 7 dividend fortresses.
- Reduce portfolio stress by focusing on financially resilient businesses screened via the 32 resilient stocks with low risk scores.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com