Lockheed Martin Q4 Earnings Preview: Wall Street Calls Stock Undervalued, Retail Stays Bearish
Synopsis
According to FinChat data, Wall Street expects Lockheed Martin to report quarterly earnings per share of $6.61 on revenue of $18.79 billion.
Lockheed Martin (LMT) shares rose 1.2% Monday afternoon as investors awaited the aerospace and defense manufacturer’s earnings report on Tuesday.
According to FinChat data, Wall Street expects Lockheed Martin to report fourth-quarter earnings per share of $6.61 on revenue of $18.79 billion. The company has topped market expectations for nine prior quarters.
Earlier in January, Citi analysts said that defense contractors would be "somewhat balanced," with positive commentary on demand from Europe, but there was some level of caution in the US given the presidential transition, according to TheFly.
Citi also said that the defense stock selloff "looks overdone" as investors have become too wary about the outlook for defense expenditure.
Bernstein analyst Douglas Harned noted that defense stocks have fallen sharply since Donald Trump’s victory in the U.S. Presidential Elections, partly due to concerns surrounding ongoing talk of budget constraints by the right-wing in the House, the impact of Elon Musk's DOGE cost reduction efforts, and a potentially more isolationist posture.
According to TheFly, Bernstein views the lower valuations make the defense group much more attractive.
U.S. military equipment sales to foreign militaries had surged to a record $318.7 billion in 2024 amid multiple global conflicts, according to the U.S. State Department.
Truist analysts have said that as the threat level remains elevated, defense spending will continue to rise in the coming periods, as per TheFly.
The brokerage also believes that while the F-35 "has a bulls-eye on its back," the program is unlikely to be canceled or curtailed in the near term.
In 2024, Lockheed Martin delivered 110 F-35 fighter jets to the U.S. and its allies. The F-35 contributes the bulk of the company's revenue.
Retail sentiment on Stocktwits edged lower to ‘bearish’ (44/100) territory from ‘neutral’(46/100) a day ago, while chatter rose to ‘high.’
Peer RTX is also scheduled to report its earnings on Tuesday.
Over the past year, the stock has gained 17.2%.
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