5. Lockheed Martin Corporation (NYSE:LMT)
Average Analyst Price Target Upside as of September 16: -2.26%
Number of Hedge Fund Holders: 56
Lockheed Martin Corporation (NYSE:LMT) operates as a global leader in security and aerospace, specializing in the development and integration of advanced technology systems and services. The company operates through four main segments, Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space.
The segments include a wide range of products and services, including combat and air mobility aircraft, unmanned air vehicles, air and missile defense systems, tactical missiles, helicopters, satellites, and space transportation systems.
The company’s notable offerings include the F-35 and F-22 fighter jets, which represent some of the most advanced aircraft in the U.S. military’s arsenal. The company’s Sikorsky unit also plays an important role in providing both military and commercial helicopters. According to Bloomberg Government, Lockheed Martin (NYSE:LMT) holds the position of the largest defense contractor in the U.S., with $46 billion in contract obligations.
However, the company has encountered several challenges recently. The company, like many other defense contractors, has faced supply chain disruptions and increased raw materials costs. Profit margins have been under pressure, and there was a temporary halt in the delivery of F-35 jets due to issues with the aircraft’s latest software. The pause lasted nearly a year and was only resolved through a compromise that involved accepting a downgraded version of the software rather than waiting for a fully tested version.
Out of the 25 analysts that have covered the stock, 11 keep Hold ratings, 1 has an Underweight rating and 1 maintains a Sell rating on it. As of September 16, the average price target of $560.00 implies a downside of 2.26% to the stock’s current price.
Despite these hurdles, Lockheed Martin’s (NYSE:LMT) prospects have shown improvement. The company recently reported strong results for the second quarter, and deliveries of the F-35 have resumed, which shows a positive turn in operations.
Additionally, it announced plans to acquire Terran Orbital in a deal valued at $450 million, which is lower than the initial $600 million offer. The acquisition is expected to significantly improve the company’s supply chain and improve its access to satellite technology, which is crucial for fulfilling Pentagon contracts.
The company has raised its 2024 revenue forecast. The company now forecasts revenues between $70.5 billion and $71.5 billion, up from the previous estimate of $68.5 billion to $70 billion. The upward revision also includes an improved EPS outlook, now projected to be between $26.10 and $26.60, compared to the earlier range of $25.65 to $26.35.
In the second quarter, 56 hedge funds had investments in Lockheed Martin (NYSE:LMT), with positions worth $2.056 billion. Two Sigma Advisors is the biggest shareholder in the company as of Q2. In the quarter, the firm increased its stake by 7% to 855,600 shares worth $399.65 million.
