- Goldman Sachs’ Noah Poponak slashes Lockheed’s price target to $398, citing margin pressure and growth risks.
- Lockheed hit a 52-week low of $410.11 after Q2 results revealed $1.6B in charges and negative free cash flow.
- Missed the rally? Learn exactly where the next leaders are emerging here.
Lockheed Martin Corp. LMT faces growing pressure from Wall Street after delivering mixed second-quarter results and absorbing nearly $1.6 billion in charges across key segments.
Goldman Sachs analyst Noah Poponak reiterated a Sell rating on Lockheed Martin and lowered his 12-month price forecast to $398 from $406. He pointed to ongoing problems that could hurt profits, reduce cash flow, and make future earnings less predictable.
Poponak noted that the latest charges in classified Aeronautics and helicopter programs within Rotary and Mission Systems (RMS) reduce segment margin expectations and may drag free cash flow lower beyond 2025.
He also highlighted risks tied to NGAD program losses and uncertainty around future F-35 funding, both of which threaten a substantial share of Lockheed’s earnings base.
Despite continued demand in missile defense and other high-profile programs, Poponak believes Lockheed is entering a more challenging phase. He cut his 2025-2028 EPS estimates and lowered his 12-month price target to $398 from $406, while maintaining a target P/E multiple of 0.81x relative to the S&P 500.
Other Analysts Also Turned Cautious Following The Results:
- Susquehanna’s Charles Minervino maintained a Positive rating and lowered his price forecast from $550 to $490.
- RBC Capital’s Ken Herbert kept a Sector Perform rating and cut his forecast from $480 to $440.
- Truist’s Michael Ciarmoli downgraded the stock from Buy to Hold and reduced his forecast from $554 to $440.
- Baird’s Peter Arment maintained an Outperform rating while trimming his forecast from $540 to $500.
- JP Morgan’s Seth Seifman maintained an Overweight rating while lowering the price forecast from $520 to $465.
Earnings Recap: Margins Hit by Legacy Program Charges
Lockheed reported net sales of $18.16 billion, slightly missing estimates, while adjusted EPS of $7.29 beat the $6.63 consensus. However, GAAP earnings fell to $1.46 per share, down sharply from $6.63 a year ago due to charges related to cost overruns and schedule slippage in legacy programs.
Operating margin collapsed to 4.1% from 11.9%, and free cash flow turned negative at $150 million. The company reaffirmed its 2025 sales guidance of $73.75 billion to $74.75 billion and free cash flow outlook of $6.6 billion to $6.8 billion, but lowered its GAAP EPS forecast to $21.70-$22.00, from $27+ previously.
IRS Dispute and ‘Golden Dome’ Talks
Adding to the pressure, Lockheed’s CFO reportedly confirmed that the IRS is seeking $4.6 billion in additional income taxes. According to Reuters, the company is challenging the claim through the IRS Independent Office of Appeals and is prepared to pursue judicial action if necessary.
Meanwhile, CEO James Taiclet confirmed discussions with U.S. officials over former President Trump’s proposed $175 billion ‘Golden Dome’ missile shield. While no contracts have been awarded, Taiclet said Lockheed is “all in” on the concept.
Lockheed Martin reached a 52-week high of $618.95 on Oct. 21, 2024, and a 52-week low of $410.11 on July 22, 2025, the day after it reported second-quarter results, marking an approximate 34% decline from its peak.
Price Action: At last check Wednesday, LMT shares were trading higher by 2.70% to $421.82.
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