Lockheed Martin Corporation LMT
LMT's FY2025 revenue grew 5.6% to $75.1B with operating income recovering to $7.73B and FCF rebounding to $6.9B, while the stock trades at a 31% P/E discount to the peer median (20.7x vs 30.1x) — a compelling valuation for a franchise with a reported $230.4B backlog. However, net income has declined for two consecutive years — from $6.9B in FY2023 to $5.0B in FY2025 — gross margin has compressed from 12.6% to 10.2%, total debt has risen to $21.7B against just $6.7B of stockholders' equity, and the MACD histogram turned negative at -5.77 as the stock slipped to $563.85.
The missile-supercycle thesis and FCF strength are real, but declining profitability, a leveraged balance sheet, persistent insider selling (net -$19.2M over 24 months), and a slightly negative smart-money score (-0.066 as of Q2 2026) warrant patience for earnings stabilization before turning more constructive.
What could go wrong
- Margin compression persists. Gross margin eroded from 12.6% (FY2023) to 10.2% (FY2025) and net margin from 10.2% to 6.7%; if cost pressures on fixed-price contracts continue, earnings could weaken further despite top-line growth.
- Balance-sheet leverage. Total debt reached $21.7B against only $6.7B of stockholders' equity as of FY2025 — a debt-to-equity profile that limits financial flexibility if interest rates stay elevated.
- Insider and smart-money outflows. Insiders net sold $19.2M over the trailing 24 months with no cluster buying, and the smart-money score turned slightly negative at -0.066 as of Q2 2026 after being positive at +0.134 the prior quarter.
- Technical deterioration. MACD histogram is negative at -5.77 with the signal line well above the MACD line, and the stock at $563.85 is barely holding above its 200-day MA ($554.9); a break below could signal further downside.
What would change my mind
Where this comes from: FMP FY2025 financials · peer_relative composite · FMP fundamentals · derived_metrics. Orin's read on LMT; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All LMT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| State Street | $16.8B | 0.5% of fund |
| Vanguard Capital Management | $7.2B | 0.2% of fund |
| Charles Schwab Investment Management | $4.0B | 0.5% of fund |
| Morgan Stanley | $2.9B | 0.2% of fund |
| Vanguard Portfolio Management | $2.8B | 0.1% of fund |
| Geode Capital Management | $2.7B | 0.1% of fund |
149 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 150 Form 4 filings, net −$19.2M. Of the 50 on hand, 0 were open-market purchases and 21 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about LMT
Orin answers questions about LMT from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 19.3× | 21.7× | 44.5× |
| EV/EBITDA | 14.0× | 15.2× | — |
| P/S | 1.57× | 1.63× | — |
| P/B | 13.8× | 16.6× | — |
Its P/E sits 40th percentile of its own last 5 years (−0.13σ from its own mean).
5.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $6.9B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$645
$575 – $700 · +22% against today's price
- 22 buy or overweight
- 14 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| LMTLockheed Martin Corporation | $121B | 19.3× | 14.0× | 11.8% | 8.2% | 86% |
| ADPAutomatic Data Processing, Inc. | $105B | 24.0× | 16.8× | 48.2% | 20.1% | 70% |
| BAThe Boeing Company | $158B | 74.9× | 28.3× | 4.7% | 2.6% | 105% |
| DEDeere & Company | $192B | 39.3× | 22.2× | 35.7% | 10.2% | 18% |
| GDGeneral Dynamics Corporation | $93B | 20.6× | 15.2× | 15.4% | 8.2% | 17% |
| HONHoneywell International Inc. | $67B | 8.2× | 7.4× | 36.6% | 22.7% | 42% |
| LHXL3Harris Technologies, Inc. | $45B | 24.0× | 14.6× | 25.5% | 8.2% | 9% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| PHParker-Hannifin Corporation | $122B | 33.6× | 22.5× | 37.7% | 17.0% | 25% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| TTTrane Technologies plc | $96B | 33.0× | 22.9× | 35.4% | 13.3% | 34% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 32.5% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $861 | $531.29 · +62% | 2026-06-10 |
| Levered DCF | $966 | $531.29 · +82% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.