Lockheed Martin(US:LMT) Yahoo Financeยท2025-09-20 22:32Investment Case for Lockheed Martin - Ongoing geopolitical conflicts, NATO enlargement, and a commitment by NATO members to increase defense spending to 5% of GDP by 2035 make Lockheed Martin a potentially attractive investment [1] - Lockheed Martin offers a 2.8% dividend yield and a price-to-free cash flow multiple of 16.5 times, aligning with management's guidance for 2025 [2] - The company's customer base primarily consists of defense departments supported by government funding, providing a reliable revenue stream [2] Challenges Facing Lockheed Martin - Defense companies, including Lockheed Martin, are facing difficulties in delivering complex projects on time and within budget, as evidenced by Boeing's multibillion-dollar losses in its defense sector [3] - Lockheed Martin has experienced significant delays and cost overruns in its F-35 fighter program, damaging investor confidence [4] - The company recently reported a $1.8 billion loss on legacy programs, indicating that these projects are not progressing as planned [5] - CEO Jim Taiclet acknowledged significant losses on a classified program, highlighting challenges in margin expansion and cost estimation for Lockheed and the defense industry [5] Market Outlook - Despite the challenges, the end market outlook for defense companies is improving, although structural issues remain that hinder profit margin expansion [7]