Lockheed Stock Before Q4 Earnings: Should You Buy Now or Wait for Results?

Earnings Release and Estimates - Lockheed Martin Corporation (LMT) is scheduled to release its fourth-quarter and full-year 2024 results on January 28 [1] - The Zacks Consensus Estimate for Q4 revenues is $18.85 billion, implying a 0.1% decline from the year-ago quarter [2] - The consensus mark for Q4 earnings is $6.52 per share, suggesting a 17.5% decline from $7.90 reported in the prior-year quarter [2] - The bottom-line estimate has decreased by 1.2% over the past 60 days [2] Earnings Surprise History - LMT has consistently outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 8.48% [3] - In the most recent quarters, the earnings surprise percentages were 5.72%, 10.23%, 9.14%, and 8.82% respectively [4] Earnings Whisper and Model Predictions - The proven model predicts an earnings beat for LMT, supported by a positive Earnings ESP of +1.98% and a Zacks Rank 3 [5] Segment Performance - The Aeronautics segment, contributing nearly 40% to the company's top line, is expected to post solid sales with a 3.5% rise to $7,877.6 million in Q4 [8] - The Space segment is projected to see a 4% decline in revenues to $3,242.7 million due to lower sales from the Orion program [9] - The Missiles and Fire Control (MFC) segment is expected to grow 4.5% to $3,115.2 million, driven by higher sales volume from missile defense programs [10][11] - The Rotary and Mission Systems segment is likely to benefit from higher production volume of helicopter programs [11] Factors Impacting Q4 Results - Unimpressive sales performance from one of LMT's major business segments may weigh down overall earnings [12] - A potential $1.3 billion loss associated with a classified missile program in the MFC unit could adversely impact operating margins and bottom-line growth [13] - Unfavorable cost pressure in the Sikorsky business may also affect overall earnings performance [14] Price Performance and Valuation - LMT's shares have risen 10.5% over the past year, outperforming the aerospace-defense industry's decline of 2.4% [15] - The stock is trading at a premium with a forward 12-month P/E of 18.09X, higher than its peer group's 15.92X and its five-year median of 15.95X [18] Industry and Investment Thesis - Global defense spending has increased due to widespread hostilities, acting as a growth catalyst for defense contractors like LMT [20] - LMT's dividend yield of 2.69% outpaces the S&P 500's 1.20%, reflecting strong shareholder rewards [21] - Elevated leverage, indicated by a higher long-term debt-to-capital ratio compared to peers, remains a concern [21] Conclusion - LMT is less likely to disappoint in its Q3 earnings release, supported by solid share price performance, favorable Zacks Rank, and positive Earnings ESP [26]