Lockheed Martin Analyst Spotlights Revenue, Free Cash Flow, Cautious About Conservative Growth Outlook

Lockheed Martin Corp. LMT reported mixed third-quarter results before Tuesday's opening bell, missing the consensus revenue estimate, but beating consensus on the bottom line. RBC Capital Markets analyst Ken Herbert offered insights into the defense contractor's report. 

The Details: Herbert highlighted Lockheed Martin's ​​Missiles and Fire Control (MFC) segment which delivered 8% revenue growth year-over-year with operating income in the segment up 15%. The MFC segment led sales and operating profit growth and the RBC analyst saw the segment as a "highlight for the potential outlook into 2025."

RBC highlighted the company's free cash flow of $2.1 billion for the quarter, which beat the consensus estimate of $1.3 billion. The research firm sees mid-single-digit growth in free cash flow based on Lockheed's working capital improvements, which will support continued strength in the stock.

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Lockheed Martin provided a multi-year growth framework for 2025 through 2027 which Herbert views as conservative and said "The lackluster baseline assumptions could have contributed to pressure on the stock today." The analyst noted, however, that given election uncertainty, the timing of contracts and caution on the supply chain the company's conservatism may be warranted. 

RBC Capital Markets maintained its Outperform rating on Lockheed Martin shares but lowered its price target from $675 to $665. 

LMT Price Action: According to Benzinga Pro, Lockheed Martin shares ended Wednesday's session 1% lower at $571.10. 

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Photo: Courtesy of Lockheed Martin