Lockheed Martin Corporation Shares Could Be Good For The Bulls

Lockheed Martin Corporation LMT shareholders have been spoiled over the last few years. The market's renewed volatility could give those bullish of Lockheed Martin shares an opportunity to add to or start new positions at more attractive prices.

What The Bulls See

• A very strong price chart in a long-term uptrend.
• Strong positive levered free cash flow of nearly $4 billion annually.
• A cheap price-to-sales ratio at 1.23.

What The Bears See

• Lofty valuation metrics outside of the price-to-sales ratio: price-to-book ratio of 13.01 (versus “fairly valued” at 3) and a P/E ratio of over 15 (based on next year's EPS projections), while its revenue growth is actually expected to decline and earnings are only expected to be up 7 percent.
• A company with a lofty debt-to-equity ratio of 142.83 percent.

Technical Take

Technicians note that Lockheed Martin shares are likely in a very short-term “abc” correction to the downside with $173.09 (Fibonacci projection and horizontal line support) as support. If that level holds, then Lockheed Martin should start to trade higher again with an upside target range of $190 to $200. If support at $173.09 fails, the stock may be in for a test of the long-term uptrend line at around $169-$170.