Lockheed Martin Shares Climb On Positive Analyst Ratings And Strong Q2 Results

Lockheed Martin Corporation LMT shares are higher Wednesday after multiple analysts raised their price targets following the company’s second-quarter earnings.

What Happened: The aerospace and defense giant reported earnings per share (EPS) of $7.11 for Q2 2024, surpassing analysts’ expectations of $6.46. Additionally, revenue for the quarter reached $18.122 billion, exceeding the anticipated $17.044 billion.

Earnings Highlight

• Revenue Growth: Consolidated revenue rose by 8.6%, surpassing both internal estimates and market consensus by 6.3%.
• F-35 Program: Lockheed Martin delivered 10 F-35 aircraft in July alone, with six featuring the TR-3 update and four with the TR-2 configuration. The company continues to project between 75 to 110 F-35 deliveries for 2024.
• MFC Margins: Margins within the Missiles and Fire Control (MFC) segment provided an upside surprise. Despite recognizing only $100 million of the $325 million expected losses for the first half of 2024, the segment’s cost pressures suggest a potential margin decrease in the second half of the year.

Guidance and Outlook: Lockheed Martin raised its 2024 guidance, increasing revenue projections by $1.75 billion and segment operating income by $175 million. Adjusted EPS guidance was also raised by $0.35 at the midpoint, though free cash flow expectations remain unchanged.

Analyst Reactions: Several analysts have responded positively to Lockheed Martin's second-quarter results, revising their price targets and ratings:

• TD Cowen: Upgraded Lockheed Martin from Hold to Buy, raising the price target from $480 to $560.
• Susquehanna: Maintained a Positive rating, increasing the price target from $540 to $565.
• UBS: Kept a Neutral rating, raising the price target from $511 to $538.
• Wells Fargo: Maintained an Equal-Weight rating, increasing the price target from $483 to $525.
• RBC Capital: Held a Sector Perform rating, adjusting the price target from $470 to $500.
• Deutsche Bank: Maintained a Hold rating, raising the price target from $487 to $540.

Price Action: Lockheed Martin’s shares climbed to $514.86, up by 2.71% according to Benzinga Pro.

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Photo courtesy: Lockheed Martin inc.