8 Best Military Drone Stocks To Buy According to Analysts

3. Lockheed Martin Corporation (NYSE:LMT)

Median Share Price Upside Potential: 10.26% 

Total Analysts: 11

Number of Hedge Fund Holders: 56

Weighted Ranking: 3.6

Lockheed Martin is the largest defense contractor in the world, with over $67 billion in revenue in 2023, of which 96% came from defense-related sales. It is famed for producing some of the most notable military aircraft in history, including the F-35 fifth-generation fighter jet. For the last several decades, the company has also been delivering advanced autonomous solutions to the U.S. military to meet the needs of its most demanding missions.

It is the RQ-170 Sentinel unmanned aerial vehicle maker, which the U.S. Air Force continues to fly over complex conflict zones. According to The National Interest, the stealth drone is believed to have played a role in the operation that killed Osama bin Laden in 2011. Some other prominent UAVs that Lockheed Martin Corporation (NYSE:LMT) manufactures include Indago 4 and The Stalker.

The company announced its third quarter 2024 financial results on October 22. Net sales for the quarter grew 1.2% year-over-year to $17.1 billion, driven by robust performances from Missiles and Fire Control, and Rotary and Mission Systems segments. Net earnings totalled $1.6 billion, translating to an EPS of $6.80 per share, which beat expectations of $6.54, and was seven cents higher than in the same period last year.

After these strong results, Lockheed Martin Corporation (NYSE:LMT) has increased its guidance for the full year, and now expects annual revenue in 2024 to be $71.25 billion, reflecting a 5% growth from 2023. The company has also raised its segment operating profit margin and now expects it to be around 10.5%, driven by the anticipation of a higher sales volume. It has also upgraded its EPS forecast by 30 cents to $26.65 per share.

The defense contractor continues to invest heavily in autonomy and artificial intelligence. It has demonstrated its capabilities in crewed-uncrewed teaming, AI-driven autonomous systems, and integrated technologies at numerous U.S. Army events this year. During one of these demonstrations, it launched an autonomous drone to provide overwatch guidance to a ground-based robot navigating a dangerous urban terrain.

Lockheed Martin is one of the best military drone stocks to buy according to analysts, who have a consensus on its Buy rating and anticipate a 10.26% uptick, in median terms, in its share price. It remains a popular stock among hedge funds as well. Among hedge funds tracked by Insider Monkey, 56 held investments in the company, as of Q2 2024.