Lockheed Rides on Solid Order Growth and International Demand

Core Viewpoint - Lockheed Martin Corp. (LMT) is expected to benefit from a steady inflow of orders for its defense products, a strong international market presence, and a solid backlog, although it faces challenges such as a shortage of skilled labor [1][5]. Group 1: Revenue Drivers - In Q4 2024, Lockheed secured significant contracts, including an $11.8 billion contract for 145 F-35 jets and a$3.4 billion logistics support contract for F-35 jets, contributing to a robust backlog [2]. - Lockheed's international market presence is notable, with 17 nations expressing interest in its PAC-3 missiles and Terminal High Altitude Area Defense system, enhancing its missile defense capabilities [3]. - The total backlog for Lockheed stood at $176 billion as of December 31, 2024, with plans to recognize approximately 35% of this backlog in the next 12 months and 60% in the following 24 months, supporting long-term revenue prospects [4]. Group 2: Challenges - The company faces risks from a labor crisis, particularly regarding skilled workers, which may hinder its ability to deliver products on schedule and affect operational performance [5]. - In 2023, Lockheed was placed on China's "unreliable entities" list due to U.S. military sales to Taiwan, and in 2024, China banned the export of certain minerals to the U.S., which could adversely impact Lockheed's business if further restrictions are imposed [6]. Group 3: Stock Performance - Over the past year, LMT shares have decreased by 3.2%, while the industry overall has declined by 5.1% [7].