Lockheed Martin upgraded post earnings on missile demand, F-35 stability

Investing.com -- Baird upgraded Lockheed Martin Corp (NYSE:LMT) to Outperform from Neutral driven by a strong global demand for missiles, reduced risk, and upbeat commentary from management following a solid first-quarter results

The brokerage sees a “multi-year step-up” in growth for Lockheed’s missile portfolio, driven by production increases across several platforms.

These include a 25% rise in GMLRS units in 2025, a doubling of HIMARS launch systems from 2023 to 2024, and a 65% jump in Javelin output by 2026.

Lockheed also reiterated 2025 delivery guidance for its F-35 fighter jet program at 170–190 aircraft, easing concerns tied to headline risks like TR3 refresh issue and the new 6^th gen jet.  

Baird noted that production will remain stable at 156 jets per year through 2027, while in-storage aircraft delayed by software issues are expected to be delivered over the next two years.

The firm said Lockheed’s early recognition of certain charges in late 2024, particularly within its Missiles and Fire Control unit, reduces the risk of unfavorable cost adjustments in 2025.

It also pointed to upside potential from the so-called “Golden Dome” defense initiative, where Lockheed could benefit by leveraging existing systems across its segments.

Lockheed maintained its 2025 guidance, with sales expected between $73.75 billion and $74.75 billion, and adjusted earnings per share of $27.00 to $27.30.

Baird raised its 2025 EPS estimate to $27.55 and kept its $540 price target, citing strong free cash flow and ongoing share buybacks as support for the stock.

Replenishment activity and growing international demand would support a more constructive stance, the analysts say, adding that Lockheed remains well-positioned as a bellwether for U.S. defense spending.