Lockheed Martin Stock Loses 16% in 3 Months: Time to Hold or Fold?

Industry Overview - The global defense industry's growth outlook remains robust due to heightened geopolitical tensions, leading to increased defense spending worldwide [15] - Aerospace-defense firms face labor shortages, with 29% of industry employees over 55 and a projected gap of 3.5 million workers by 2026 [1] Company Performance - Lockheed Martin's share price declined 16.1% in the past three months, underperforming the Aerospace-Defense industry's decline of 7.2% and the S&P 500's return of 5.6% [7] - Third-quarter 2024 revenues of $17.28 billion lagged analysts' expectations, contributing to the stock's downward movement [8] - The company's backlog rose sequentially to$165.69 billion as of Sept. 30, 2024, from $158.34 billion, supporting revenue growth [15] Financial Metrics - Lockheed's cash and cash equivalents totaled$3.15 billion at the end of the third quarter of 2024, with current debt of $0.14 billion, indicating strong solvency [4] - The consensus estimate for long-term (three-to-five years) earnings growth rate is pegged at 4.5$100 million as of Sept. 30, 2024 [17] - U.S. sanctions imposed in 2020 affected Lockheed's ability to execute contracts under the Turkish Utility Helicopter Program ("TUHP"), potentially leading to significant reachforward losses [20][26] Valuation - Lockheed's forward 12-month price-to-earnings (P/E) is 17.47X, a premium to its peer group's average of 15.80X, suggesting a higher price relative to expected earnings growth [18] Comparative Performance - Other aerospace manufacturers like Boeing (BA), Airbus Group (EADSY), and Embraer (ERJ) have seen share price surges of 18.7%, 10.6%, and 3%, respectively, over the past three months [3]