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On Wednesday, Susquehanna maintained a Positive rating on Lockheed Martin (NYSE:LMT) stock and increased the shares target to $565 from the previous $540.
The adjustment followed Lockheed Martin's announcement of better than expected second-quarter results for 2024, which led to an increase in the company's full-year guidance.
Lockheed Martin reported a successful second quarter, prompting an upward revision of its 2024 revenue, segment operating profit, and earnings per share (EPS) forecasts.
The company's F-35 program is progressing as planned, with the first phase of deliveries for aircraft in the combat-training-capable configuration already underway. Management confirmed that the delivery target for the current year remains between 75 and 110 aircraft.
The company is currently flight testing over 95% of the Technology Refresh3 (TR-3) capabilities, which is a significant step towards the full deployment of the combat-capable TR-3, anticipated to occur next year. This development is a key component of the F-35 program's continued advancement.
Within its portfolio, Lockheed Martin saw particularly strong performance in its Missiles and Fire Control (MFC) and Rotary and Mission Systems (RMS) segments, both of which experienced double-digit year-over-year revenue growth with robust margins. These results contribute to the company's strong position within the global defense sector.
Lockheed Martin's execution across its business units remains solid, bolstered by a substantial backlog totaling $158.3 billion as of the end of the second quarter. This backlog is indicative of the company's ongoing commitment to delivering on its contracts and sustaining its growth trajectory in the defense industry.
In other recent news, Lockheed Martin reported robust financial results for the second quarter, with earnings per share of $7.11 and a revenue increase of 6% to $18.1 billion.
The company's backlog stands at nearly $160 billion, promising a solid foundation for future earnings. Lockheed Martin plans to deliver up to 110 F-35 aircraft in the latter half of this year, following a strong second quarter and a restart of F-35 deliveries.
In terms of analyst activity, Lockheed Martin's stock received upgrades from TD Cowen and Deutsche Bank, with new price targets set at $560 and $540 respectively.
RBC Capital also raised its price target for the company to $500. These adjustments reflect a positive outlook for the company's financial performance in the coming years.
Furthermore, Lockheed Martin is involved in strategic collaborations in defense technologies in Poland, Germany, and Australia, aiming to ramp up production for various defense systems.
Despite challenges such as pension contributions and certain areas requiring supply chain improvement, the company's leadership has expressed confidence in its ability to meet demand and ramp up production.
In the defense sector, there is an expectation of continued military spending amid geopolitical tensions. Despite political changes in the United States and Europe, defense companies remain optimistic about sustained or increased military spending to address concerns regarding Russia and China. These are the recent developments in Lockheed Martin's operations and financial performance.
InvestingPro Insights
Following the positive outlook from Susquehanna on Lockheed Martin, key financial metrics from InvestingPro provide a deeper dive into the company's performance and valuation. Lockheed Martin's market capitalization stands at a robust $120.28 billion, reflecting investor confidence. The company's adjusted price-to-earnings (P/E) ratio for the last twelve months as of Q1 2024 is 17.36, which, coupled with a PEG ratio of 0.69, suggests that the stock may be trading at a reasonable valuation relative to its earnings growth. Additionally, the revenue growth for the last twelve months was 5.28%, with a more pronounced quarterly revenue growth of 13.68% for Q1 2024, underscoring the company's strong performance.
InvestingPro Tips highlight that Lockheed Martin has been a consistent performer with its dividend, raising it for 21 consecutive years and maintaining payments for 41 consecutive years, which is a testament to its financial stability and commitment to shareholders. Moreover, the company's stock generally trades with low price volatility, providing a level of predictability for investors. For those seeking more comprehensive analysis and insights, there are 15 additional InvestingPro Tips available, which can be accessed through the platform. To get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, readers can use the coupon code PRONEWS24.
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