Lockheed Can Unlock Significant F-35 Growth Potential With This Clever Pivot: Analyst

Truist Securities analyst Michael Ciarmoli reiterated a Buy rating on Lockheed Martin Corporation LMT with a price forecast of $579 following first-quarter results reported on Tuesday.

The company reported a 4% year-over-year increase in net sales to $18 billion, beating the consensus of $17.8 billion. It clocked a GAAP EPS of $7.28, beating the consensus of $6.32.

Lockheed Martin continues to expect FY25 net sales of $73.75 billion-$74.75 billion versus the consensus of $74.28 billion. LMT reiterated EPS guidance of ~$27.00-$27.30 versus the consensus of $27.21.

Lockheed Martin says ‘2025 outlook does not include the evolving impacts of tariffs or related recoveries, the recent Next Generation Air Dominance announcement, or Executive Orders issued by the Administration.‘

The analyst writes that the results suggested that even after the NGAD (Next Generation Air Dominance) contract bid loss, reaching the upper end of the company’s multi-year growth targets remains a possibility.

During Lockheed's first quarter of 2025 earnings call, CEO Jim Taiclet said he had challenged his team to deliver "80% of 6th Gen capability at 50% of the cost" by applying technologies developed for its NGAD bid to the existing F-35 platform.

Ciarmoli believes this presents a compelling opportunity and can drive growth.

Moreover, the analyst notes that the current geopolitical landscape is fueling increased investment in defense budgets and driving higher demand for defense capabilities globally, which continues to boost Lockheed Martin’s backlog.

The analyst anticipates that these positive results should alleviate the uncertainty that has been weighing on the company’s shares.

Ciarmoli revised EPS estimates to $27.40 (from $27.00) vs. consensus of $27.22 in FY25 and $29.66 (from $29.49) vs. street view of $29.78 for FY26.

Investors can also monitor the broader defense sector through ETFs, including the First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF MISL and the Invesco Aerospace & Defense ETF PPA. 

Price Action: LMT shares are up 0.04% at $462.27 at the last check Wednesday.

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