Lockheed Martin (LMT)
The desk's stance
On the bench since Oct 7, 2026, on the G-Street slate.
Pac-3 and missile backlog at $230B offers defense fortress safety, but we want better entry valuation below $460.
Buy below $460.
What the company does
The biggest defense contractor on earth: F-35, missiles and fire control, Skunk Works, and space systems.
Why it matters: The bellwether for the whole sector — its backlog is a readout on western rearmament.
Outlook: Backlog sits near record levels on missile replenishment and European rearmament, but growth is flat (+0.3% YoY) — the bull case rests on production capacity, F-35 upgrades, and Golden Dome awards.
In short: Global aerospace and defense contractor. Category: Mega-cap Defense Prime. Sector: Industrials, Aerospace & Defense.
G-Street Value and Score
G-Street Value: $570.34, computed Oct 18, 2026 (confidence: medium).
How we got there: 70% analyst leg $570.34 (5 analyst targets, credibility- and freshness-weighted, after 8% optimism discount) + 30% GainStreet factor value $811.11 (24.85× fwd EPS anchored to aerospace-defense multiples) — capped at the analyst leg; factors never out-bull the street.
G-Street Score: 48 out of 100 (Weak).
- Top-line growth & guidance: 10 of 32
- Margin power: 3 of 15
- Revenue visibility & quality: 6 of 11
- Profitability & balance sheet: 17 of 24
- Capital allocation & governance: 5 of 6
- Valuation, sentiment & momentum: 7 of 12
Our current thesis
Updated Oct 18, 2026
The thesis
- Record $230.4B backlog provides nearly three years of revenue visibility across critical defense franchises.
- Rapid PAC-3, THAAD, and strike missile demand expands Lockheed's highest-margin segment.
- At 16.9x forward earnings, valuation trades at an attractive discount to prime peer RTX.
Risks
- Fixed-price development contracts remain vulnerable to cost overruns and margin compression.
- F-35 TR-3 modernization schedule risks and delivery pacing could disrupt Aeronautics cash receipts.
- U.S. defense appropriations delays and congressional budget uncertainty risk slowing contract definitization.
What we're watching
- Q3 2026 earnings release on October 22, 2026, focused on missile margin progression.
- Holding support above the $550 pivot following the recent 7.9% one-week technical rebound.
- Updates on international allied munition replenishment awards and FY2027 defense budget clarity.
Latest
LMT trades at $552.09, advancing 7.9% over the past week as shares rebound ahead of Q3 2026 earnings on October 22. Fundamentals are anchored by a record $230.4B backlog and surging Missiles and Fire Control orders, driving 10.5% YoY revenue growth in Q2. At 16.9x forward P/E, LMT trades at a discount to peers RTX (24.6x) and GD (18.5x), reflecting fixed-price contract scrutiny.
Key numbers
As of Oct 16, 2026: market cap $127.4B · revenue growth +10.5% year over year · gross margin 11.8% · net margin 8.2% · forward P/E 16.9 · next earnings Oct 22, 2026.
Analyst price targets
Published analyst targets we could trace to a named source.
- UBS, Buy: $653 target (October 2026). Source: www.investing.com
- Bernstein, Market Perform: $564 target (October 2026). Source: tradingview.com
- Barclays, Equal-Weight: $554 target (October 2026). Source: barchart.com
- Citigroup, Buy: $691 target (August 2026). Source: marketbeat.com
- Morgan Stanley, Equal-Weight: $690 target (July 2026). Source: stockcircle.com
Decision history
- Oct 7, 2026 — Moved to The bench at $499.22. Record $230B defense backlog at a reasonable 15x forward P/E; waiting for margin relief on fixed-price contracts.
On the Gainz Lab maps
Who it does business with
- Howmet Aerospace supplies Lockheed Martin — Airframe parts (about $1.0B a year). F-35 airframes are full of Howmet-engineered metal.
- TransDigm supplies Lockheed Martin — Sole-source parts (about $1.0B a year). TransDigm’s sole-source components sit across the primes’ aircraft programs.
- Palantir partners with Lockheed Martin — AI software layer. Palantir partners with the primes to modernize the software inside their platforms.
- Anduril competes with Lockheed Martin — Autonomy vs legacy. Anduril bids product-first autonomous systems against the primes’ cost-plus model.
- Lockheed Martin competes with RTX (Raytheon) — Missiles & air defense. The two missile giants split the replenishment supercycle.
- Lockheed Martin competes with Northrop Grumman — Aircraft & space programs. Stealth aircraft and military space contracts flow to one or the other.
- Boeing (Defense, Space & Security) competes with Lockheed Martin — Fighters: F-47 vs F-35. Boeing took the F-47 sixth-generation fighter from Lockheed in March 2025 — the two now split the Air Force’s fighter future.
- Lockheed Martin supplies Governments — Aircraft, missiles & space (about $70.0B a year). Virtually all of Lockheed’s ~$75B revenue is government — the US and allied ministries.
In the Daily Brief
Named in 1 edition on 1 day.
- Jul 24, 2026: The AI bill landed for big tech and Tesla stalled, but Lockheed is reminding us what real growth looks like