Why Lockheed Martin Stock Is Down Today

Core Viewpoint - Lockheed Martin has lost a significant contract to produce the Air Force's next-generation fighter, leading to a decline in its stock price and raising concerns about its future revenue streams [1][4]. Group 1: Company Performance - Lockheed Martin is the largest pure-play defense contractor and has historically dominated fighter technologies, winning the last two major Pentagon fighter competitions with the F-22 Raptor and F-35 Joint Strike Fighter [2]. - The recent loss to Boeing, which secured a $19 billion contract for the sixth-generation fighter, could result in over$250 billion in revenue for Boeing and its subcontractors over the coming decades [3]. Group 2: Market Reaction - Following the announcement, Lockheed Martin's stock fell approximately 3% and was downgraded from buy to hold by several investment banks [1][4]. - The company may soon face further challenges as Northrop Grumman is favored to win another U.S. Navy fighter competition, potentially leaving Lockheed with only the F-35 in production [4]. Group 3: Future Outlook - Despite the setback, Lockheed Martin is expected to continue generating revenue from the F-35 program and has other defense projects, including helicopters, missiles, and electronics, to sustain sales [5]. - Discussions around a new U.S. missile defense system could provide future opportunities, although no concrete developments are anticipated in the near term [6]. - The company currently offers a dividend yield of 3%, which may attract investors willing to wait for a recovery [6].