# Lockheed Martin Corporation (LMT)

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-12  
**Report type:** Primer (steps 1–3 of 19)  
**API endpoint:** GET /api/v1/research/LMT/primer

## Business Model

---
ticker: LMT
step: 01
generated: 2026-05-12
source: quick-research
---

### Lockheed Martin Corporation (LMT) — Business Overview

#### Business Description
Lockheed Martin is the world's largest defense contractor by revenue ($75B FY25), the sole-source manufacturer of the **F-35 Lightning II** (the largest defense program in history), and a top supplier of missiles, missile defense, space systems, and military helicopters (Sikorsky). The company operates across four segments — Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS), and Space. Driven by surging global defense demand (Ukraine, Israel, Pacific deterrence, NATO commitments) + the Trump administration's proposed $1.5T defense budget by 2027 (vs. $901B in 2026), Lockheed finished 2025 with a **record $194B backlog** — among the highest sustained defense backlogs in industry history.

#### Revenue Model
Four reportable segments (FY25 revenue):
- **Aeronautics** (~$30B, ~40%) — F-35 Lightning II (~$20B run-rate), F-22 sustainment, C-130J Super Hercules, F-16 Block 70, Skunk Works classified programs.
- **Missiles and Fire Control (MFC)** (~$13B, ~17%) — PAC-3 (Patriot interceptors), THAAD, JASSM, LRASM, HIMARS, Precision Strike Missile (PrSM), Long Range Standoff Weapon (LRSO), HELIOS laser systems.
- **Rotary and Mission Systems (RMS)** (~$18B, ~24%) — Sikorsky Black Hawk + CH-53K King Stallion helicopters, Aegis Combat System (Navy), littoral combat ship, advanced electronics, integrated air & missile defense.
- **Space** (~$13B, ~18%) — Government space (classified + civil), Trident II D5 LE ballistic missiles, missile defense interceptors, satellite constellations, classified programs.

Revenue is overwhelmingly long-cycle (multi-year cost-plus + fixed-price). US Department of Defense + Foreign Military Sales together ~95% of customer base.

#### Products & Services
- **F-35 Lightning II**: 5th-gen multi-role fighter; sole producer for US + 17 partner/customer nations. 156 aircraft/yr production rate target. 850+ delivered to date; lifetime production ~3,500 aircraft.
- **F-22 Raptor + sustainment**: Out of production; sustainment + upgrades through 2030s.
- **C-130J Super Hercules**: Tactical airlift; multi-decade program.
- **F-16 Block 70/72**: Production line in Greenville, SC for export customers.
- **PAC-3 MSE (Patriot)**: Capacity ramping from 620/yr to 2,000/yr by 2027. Critical for Ukraine + Israel + Pacific air defense.
- **THAAD**: Theater High-Altitude Area Defense; multi-decade missile defense program.
- **JASSM / LRASM**: Air-launched cruise + anti-ship missiles. Production ramping.
- **Trident II D5 Life Extension**: Navy submarine-launched ICBM modernization; $10B+ contracted work.
- **Sikorsky Black Hawk + CH-53K**: Military helicopters; ongoing production + sustainment.
- **Aegis Combat System**: Navy combat management + ballistic missile defense.
- **NGI / NGAD components**: Sub-contractor on next-generation programs.
- **Classified Skunk Works programs**: 6th-gen fighter, drones, autonomy, hypersonics.

#### Customer Base & Go-to-Market
- **US Department of Defense** (~75% of revenue): All military services + DARPA + Missile Defense Agency.
- **Foreign Military Sales** (~25%): F-35 international (UK, Italy, Netherlands, Norway, Israel, Japan, South Korea, Australia, Finland, Switzerland, Belgium, Denmark, Canada, Singapore, Poland, Germany, Romania, Greece, etc.); F-16 (Bahrain, Bulgaria, Taiwan, Slovakia, Turkey); PAC-3 international.
- **NASA**: Various space programs (Orion crew capsule sub-contract).
- **Commercial**: Smaller; international space + classified.

Distribution: Direct US government contracts; foreign military sales via US Government channels.

#### Competitive Position
Lockheed Martin is the dominant US defense prime with structural advantages:

1. **F-35 sole-source program** — World's most advanced 5th-gen fighter; only Lockheed produces it. ~$1.5T+ lifetime program value across production + sustainment + upgrades through 2080.
2. **Record $194B backlog** — Multi-year revenue visibility; book-to-bill consistently >1.0x.
3. **Trump $1.5T defense budget by 2027** — Lockheed is largest single beneficiary.
4. **PAC-3 production capacity ramping 3x (620 → 2,000/yr)** — Long-duration framework agreements; multi-billion incremental annual revenue.
5. **Sikorsky helicopter franchise** — Black Hawk + CH-53K + commercial; multi-decade revenue streams.
6. **Skunk Works classified programs** — Pipeline of 6th-gen fighter, drones, autonomy, hypersonics that aren't visible in current backlog.

**Competitive challenges vs. peers:**
- **Boeing Defense** — F-15EX + KC-46 + apache; recovering from execution issues; F-35 substitution risk minimal.
- **RTX (Raytheon)** — Direct competitor in missiles (PAC-3 partner via Raytheon's Patriot system); Pratt & Whitney F-35 engine.
- **General Dynamics** — Naval + ground vehicles + IT services.
- **Northrop Grumman** — B-21 + Sentinel + space competition.
- **NGAD program** — Lost Air Force NGAD prime award to Boeing (2024); could pressure Lockheed's long-term fighter dominance. However, Lockheed is competing on Navy F/A-XX + classified programs.

**Active risks:**
- NGAD loss to Boeing — multi-decade fighter franchise risk.
- F-35 cost overruns — fixed-price LRIP contracts create margin pressure.
- F-35 sustainment cost criticism — Block 3 → Block 4 upgrade delays.
- Aerojet Rocketdyne acquisition blocked by FTC in 2022 (was $4.4B).

#### Key Facts
- Founded: 1995 (Lockheed-Martin Marietta merger); Lockheed dates to 1912
- Headquarters: Bethesda, Maryland
- Employees: ~122,000
- Exchange: NYSE
- Sector / Industry: Industrials / Aerospace & Defense
- Market Cap: ~$120B
- FY2024 Revenue: $71.0B
- FY2025 Revenue: $75.0B (+5.6%)
- FY2025 Q4 Revenue: $20.3B (+9% YoY)
- Backlog: $194B record
- 2026 Revenue Guide: $77.5–80B (+5% organic)
- 2026 Segment Operating Profit Growth: +25%+
- 2026 EPS Guide: $29.35–30.25
- 2026 Free Cash Flow Guide: $6.5–6.8B
- F-35 Production Rate: 156/yr
- PAC-3 Capacity Target: 2,000/yr by 2027 (up from 620)
- Dividend Yield: ~2.8%
- CEO: Jim Taiclet (since 2020)

## Financial Snapshot

---
ticker: LMT
step: 04
generated: 2026-05-12
source: quick-research
---

### Lockheed Martin Corporation (LMT) — Financial Snapshot

#### Income Statement Summary

| Metric | FY2023 | FY2024 | FY2025 | YoY (FY25) |
|--------|--------|--------|--------|------------|
| Revenue | $67.6B | $71.0B | $75.05B | +5.6% |
| Q4 Revenue (FY25) | — | $18.6B | $20.3B | +9% |
| Segment Operating Margin | 11.0% | 9.8% (FY24 charges) | ~11% recovery | +120 bps |
| Diluted EPS | $27.55 | $22.31 | ~$27 | recovery from FY24 charges |

#### Segment Detail (FY2025 approximate)

| Segment | FY25 Revenue | YoY |
|---------|--------------|-----|
| Aeronautics | ~$30B | mid-single-digit |
| Missiles and Fire Control | ~$13B | strong growth (PAC-3 + JASSM ramp) |
| Rotary and Mission Systems | ~$18B | mid-single-digit |
| Space | ~$13B | mid-single-digit |

#### Cash Flow & Capital Allocation (FY2025)

| Metric | Value |
|--------|-------|
| Operating Cash Flow | ~$8B |
| Capital Expenditures | ~$1.7B |
| Free Cash Flow | ~$6.3B |
| Share Repurchases | ~$3B |
| Dividends Paid | ~$3.1B |
| Quarterly Dividend | $3.45 |
| Annual Dividend | $13.80 |
| Dividend Yield | ~2.8% |
| Cash & Marketable Securities | ~$2.5B |
| Total Debt | ~$20B |
| Backlog (FY25 End) | $194B (record) |

#### FY2026 Guidance

| Metric | 2026 Guide |
|--------|-----------|
| Revenue | $77.5–80.0B (+5% organic) |
| Segment Operating Profit Growth | +25%+ YoY (recovery from FY24 charges) |
| Diluted EPS | $29.35–30.25 |
| Free Cash Flow | $6.5–6.8B |
| F-35 Production Rate | 156 aircraft/yr |
| MFC Sales Growth | +14% (midpoint) |

#### Key Ratios (approximate)
- P/E: ~16x (FY26 EPS midpoint $29.80) | EV/EBITDA: ~11x | FCF Yield: ~5.5%
- Revenue Growth (FY25): +5.6%
- Segment Operating Margin: ~11% (recovering)
- Dividend Yield: ~2.8% | Buyback Yield: ~2.5%
- Backlog: $194B (multi-year revenue visibility)
- Book/Bill Ratio: ~1.1x

#### Growth Profile
FY25 was a record year operationally:
- Revenue +5.6% to $75B
- Record $194B backlog (+6% YoY)
- Q4 revenue +9% to $20.3B accelerating
- FY26 guide implies continued ~5% organic growth + +25% operating profit recovery from FY24 charges

The 2026-2028 setup:
- **2026**: PAC-3 capacity ramp + Skunk Works classified + Trident II D5 LE production + F-35 stable
- **2027**: Trump defense budget acceleration; MFC capacity additions
- **2028**: Full PAC-3 capacity at 2,000/yr; F-35 sustainment expanding; classified programs maturing

CEO Jim Taiclet has positioned Lockheed as the **digital backbone of 21st-century warfighting** — combining sensor + missile + platform + classified programs into the most comprehensive defense portfolio.

#### Forward Estimates
FY2026 Guide:
- Revenue: $77.5–80B (+5% organic)
- Adjusted EPS: $29.35–30.25 (+8–11%)
- Free Cash Flow: $6.5–6.8B
- Segment Operating Profit Growth: +25%+

Bull case: Trump $1.5T defense budget materializes; PAC-3 capacity ramps faster than 2027; Foreign Military Sales accelerate; FY27 revenue +8% with margins expanding to 12%+; EPS reaches $34+; multiple expands to 19x P/E; stock could reach $670+. Bear case: F-35 cost overruns intensify; NGAD pivot to Boeing accelerates; PAC-3 ramp delays; multiple compresses to 14x; stock stays $420-450. Consensus targets ~$580–640 vs. trading ~$485–510 (~15–25% implied upside).

## Recent Catalysts

---
ticker: LMT
step: 12
generated: 2026-05-12
source: quick-research
---

### Lockheed Martin Corporation (LMT) — Investment Catalysts & Risks

#### Bull Case Drivers

1. **Record $194B backlog** — Multi-year revenue visibility unmatched in defense. Book-to-bill consistently >1.0x.
2. **Trump $1.5T defense budget by 2027 vs. $901B in 2026** — Lockheed is the largest single beneficiary of proposed defense budget acceleration. Multi-year tailwind.
3. **PAC-3 capacity ramp 620 → 2,000/yr by 2027** — More than 3x capacity expansion under long-duration framework agreements; multi-billion incremental annual revenue. Most direct beneficiary of Ukraine + Israel + Pacific air defense demand.
4. **F-35 sole-source through 2080** — World's most advanced 5th-gen fighter; $1.5T+ lifetime program value. Production stable at 156/yr; sustainment + Block 4 upgrades multi-decade.
5. **MFC sales +14% expected in FY26** — Highest growth segment; expanding margins; multi-year backlog conversion.
6. **FY26 segment operating profit growth +25%** — Recovery from FY24 charges + cost-out + production ramp drives outsized profit growth.
7. **Trident II D5 LE program** — $10B+ contracted work; multi-decade Navy submarine-launched ICBM modernization.
8. **Skunk Works classified programs** — 6th-gen fighter (Navy F/A-XX), drones, autonomy, hypersonics; pipeline not in current backlog.
9. **2.8% dividend yield + ~5% buyback yield** — Combined capital return ~7-8%; sustainable through cycle.

#### Bear Case Risks

1. **NGAD loss to Boeing in 2024** — Lost Air Force NGAD prime contract; multi-decade air-superiority fighter franchise risk. Could pressure long-term fighter dominance.
2. **F-35 cost overruns + fixed-price LRIP** — FY24 charges $1.7B+ on Block 4 + sustainment cost issues; further overruns hit Aeronautics margins.
3. **F-35 sustainment cost criticism** — Air Force + Congress pushing for lower sustainment costs; could compress sustainment margins.
4. **Defense budget political uncertainty** — Continuing resolutions + debt ceiling fights + administration changes despite proposed budget growth.
5. **Foreign Military Sales geopolitical risk** — F-35 export to multiple countries depends on diplomatic relationships; Israel/Saudi/Turkey-related controversies.
6. **PAC-3 capacity ramp execution** — 3x capacity expansion requires complex supply chain + workforce expansion; could miss 2027 target.
7. **Hypersonics + AI weapons disruption** — Long-tail risk that new weapon classes disrupt traditional ballistic missile + air defense paradigms.
8. **Stock price catch-up after underperformance vs. peers** — LMT has underperformed peer defense stocks; some catch-up possible but multiple compression risk on guide-down.

#### Upcoming Events
- **Q2 2026 earnings (mid-July 2026)**: Mid-year guide check + PAC-3 capacity progress.
- **Q3 2026 earnings (mid-October 2026)**: F-35 Block 4 milestones + classified program updates.
- **PAC-3 capacity expansion milestones**: Multi-quarter capacity additions.
- **FY2027 Defense Budget appropriations**: Multi-quarter visibility on F-35, PAC-3, THAAD funding.
- **Navy F/A-XX competition**: Lockheed vs. Boeing 6th-gen Navy fighter decision.
- **F-35 export announcements**: New Foreign Military Sales (Italy, Germany, Poland, Romania additions).
- **Skunk Works disclosures**: Classified program reveals at periodic disclosures.

#### Analyst Sentiment
Consensus rating is **Buy / Overweight** (~60% Buy, 35% Hold, 5% Sell). Price targets cluster $580–640 vs. trading ~$485–510 (~15–25% implied upside). Bull case targets ~$700 on PAC-3 ramp + F-35 stability + defense budget acceleration; bear case ~$420 on F-35 cost issues + NGAD overhang. Wells Fargo, Bernstein, BofA, Wolfe maintain Buy/Overweight; Morgan Stanley at Overweight; Goldman at Buy; UBS at Neutral.

#### Research Date
Generated: 2026-05-12

## Full Research Available

This primer covers steps 1–3 of 19. The full deep dive (moat analysis, DCF, bull/bear,
management quality, earnings transcript analysis) is available via:

- Investment memo: /memo/lmt
- Full research API: GET /api/v1/research/LMT/memo
- Coverage universe: /stocks