Lockheed Martin stock price target lowered to $440 by RBC on program losses

Investing.com - RBC Capital has lowered its price target on Lockheed Martin (NYSE:LMT) to $440.00 from $480.00 while maintaining a Sector Perform rating on the defense contractor’s stock. The stock, currently trading at $422.31, is near its 52-week low of $410.11, though InvestingPro analysis suggests the company is currently undervalued.

The price target reduction follows Lockheed Martin’s second-quarter 2025 results, which RBC described as "soft" due to approximately $1.6 billion in program losses that led to a 78% miss in earnings per share compared to expectations.

Lockheed Martin has subsequently lowered its 2025 EBIT (earnings before interest and taxes) and EPS (earnings per share) guidance to reflect these second-quarter charges, according to RBC’s analysis.

RBC noted that while the outlook for Lockheed’s Missiles and Fire Control (MFC) segment remains attractive, the company faces challenges in its path to free cash flow growth over the next few years.

The investment firm cited "execution headwinds" and "tax risk" as offsetting what it characterized as an "improving fundamental backdrop" for the aerospace and defense company.

In other recent news, Lockheed Martin reported financial results for the second quarter of 2025, revealing a significant earnings per share (EPS) miss. The company posted an EPS of $1.46, which was considerably below the forecasted $6.54, marking a surprising shortfall of 77.68%. Additionally, revenue came in at $18.2 billion, falling short of the anticipated $18.58 billion. Following these results, UBS adjusted its price target for Lockheed Martin to $453.00, citing challenges with the company’s fixed-price programs. Truist Securities downgraded Lockheed Martin from Buy to Hold and reduced its price target to $440.00 after the company reported $1.8 billion in charges. Vertical Research Partners also lowered its price target to $460.00, maintaining a Hold rating, and pointed to ongoing challenges, including the loss of the Next (LON:NXT) Generation Air Dominance competition and the departure of the CFO. Fitch Ratings assigned an ’A’ rating to Lockheed Martin’s proposed senior unsecured notes, which will be used for general corporate purposes. These developments highlight the financial and operational hurdles facing Lockheed Martin.

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