Lockheed Martin: Missile Demand Is Surging, But The Stock Still Prices In Some Execution Risk

Lockheed Martin earns a Buy rating, driven by a record $230B backlog, robust PAC-3/THAAD demand, and moderate valuation versus peers. LMT's investment case hinges on successful production execution, especially for F-35 and missile defense programs, amid rising fixed-price contract risks.

Normalized FCF yield is about 5.8%, with a 2.6% dividend yield; guidance targets $7.0–$7.2B FCF and an EPS of $29.95–$30.65 for 2026.

Buy conviction strengthens with consistent F-35 execution and FCF delivery; new large write-downs or persistent contract asset growth would undermine the thesis.

Lockheed Martin gets a “ Buy ” rating thanks to a record backlog, accelerating PAC-3 and THAAD procurement, and steady growth in defense demand. Moreover, the company’s current valuation remains moderate relative to other large companies in the