Lockheed Martin (LMT) continues to appear to be very well-positioned to benefit from the Trump administration’s anti-missile initiative, and the firm’s F-35 business seems to be strengthening.
Also noteworthy is that the company reported strong fourth-quarter results on January 29, while a prominent bank recently upgraded its rating on LMT stock to Buy.
In light of all of these points, along with the stock’s attractive valuation, I believe that some investors should consider buying LMT stock at this point.
Lockheed Anti-Missile and F-35 Businesses
As I noted in a past column on LMT, published on September 30, “the company’s Patriot Advanced Capability-3 (PAC-3) anti-missile system has strong momentum, as the U.S. Navy is asking Congress for funding to purchase PAC-3s for the first time, while the Army has sought permission to quadruple its utilization of the system.”
This momentum appears to be continuing, as the firm made an agreement with the Pentagon to “more than triple (the) production capacity” of its PAC-3s. More specifically, by the end of 2030, LMT will be able to produce 2,000 of the missile-defense systems annually.
Meanwhile, Lockheed also recently demonstrated that its Joint-Air-to-Ground Missile (JAGM) was able to “neutralize” drones . Finally, the firm reportedly recently took the wraps off “of a comprehensive hypersonic missile defense system (that it has) developed over the past three years.”
In the wake of these events, my confidence in Lockheed’s ability to benefit prolifically from the Trump administration’s huge anti-missile initiative, Golden Dome, has significantly increased.
As far as the F35 fighter jet is concerned, the company delivered a record 191 of the planes in 2025, up from the previous mark of 142. Also encouragingly, the company noted that “Annual F-35 production is now running at a pace five times faster than any other allied fighter currently in production.”
Impressive Q4 Results
Lockheed’s total segment operating profit jumped a robust 11% versus the same period a year earlier to $6.7 billion, while its sales climbed 6% year-over-year to $75 billion. Most impressively, the company’s backlog advanced 17% YOY to an all-time high of $194 billion.
LMT Stock Receives an Encouraging Upgrade
Earlier this month, Truist Securities raised its rating on Lockheed to Buy from Hold and increased its price target on the name to $605 from $500. The bank believes that the valuation of LMT stock is attractive, and it expects the contractor’s performance to improve this year.
Moreover, it predicted that the revenue of Lockheed’s Missiles and Fire Control (MFC) unit would increase by at least 10% this year amid powerful demand for the business’s offerings. Finally, the bank believes that Lockheed will get a boost from continued tensions between countries this year, and Truist is also bullish on the company’s upcoming offerings.
Valuation and the Bottom Line on LMT Stock
Since Lockheed has a fairly low forward price-earnings ratio of 19.8 times, along with multiple, strong, positive catalysts, I agree with Truist’s assessment that the stock’s valuation is attractive.
But because Lockheed is a huge company whose stock is unlikely to double or triple within the next year or two, I think the shares are best suited for conservative investors and value investors.
*This article is intended to be informational only; it is not financial advice.
