Should You Buy, Hold or Sell LMT Stock Ahead of Q4 Earnings?

Core Insights - Lockheed Martin (LMT) is expected to report fourth-quarter 2025 results on January 29, 2026, with revenue estimates at $19.83 billion, reflecting a 6.5% increase year-over-year, while earnings per share (EPS) are projected at $6.24, indicating an 18.6% decline from the previous year [1][5]. Revenue Estimates - The Zacks Consensus Estimate for current quarter revenue is $19.83 billion, with a year-over-year growth estimate of 6.48% [2]. - The revenue for the next quarter is estimated at $18.71 billion, with a growth estimate of 4.17% [2]. - For the current year, total revenue is projected at $74.55 billion, with a growth estimate of 4.94%, and for the next year, it is expected to reach $77.80 billion, with a growth estimate of 4.36% [2]. Earnings Estimates - The Zacks Consensus Estimate for EPS in the current quarter is $6.24, reflecting a year-over-year decline of 18.64% [3]. - The next quarter's EPS estimate is $7.13, with a slight decline of 2.06% expected [3]. - For the current year, EPS is projected at $21.90, indicating a significant decline of 23.08%, while the next year’s EPS is expected to rise to $29.55, reflecting a growth of 34.93% [3]. Performance Metrics - LMT has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 13.29% [4]. - The company has an Earnings ESP of -9.36% and a Zacks Rank of 3, indicating a neutral outlook for the upcoming earnings report [6]. Key Growth Drivers - Increased production of F-35 jets, missiles, helicopters, and space programs is expected to drive revenue growth [5][8]. - The Aeronautics segment is likely to benefit from higher sales volume due to increased production contracts for the F-35 jet program [8]. - The Missiles and Fire Control segment is anticipated to see improved sales performance from tactical and strike missile programs [8]. Challenges Impacting Earnings - Higher tariff-related costs and program charges are expected to pressure earnings despite increased sales volume [10]. - Losses from helicopter contracts and charges related to classified programs are also anticipated to negatively impact the bottom line [11]. Stock Performance and Valuation - LMT's stock has increased by 41.6% over the past six months, outperforming the aerospace-defense industry growth of 8.6% [12]. - The forward 12-month price-to-sales (P/S) ratio for LMT is 1.76X, which is lower than the industry average of 2.72X, suggesting a more favorable valuation compared to peers [13]. Long-term Outlook - The company is well-positioned for long-term growth due to steady demand for core defense programs and a strong order backlog [15]. - Continued contract wins across key platforms, rising international demand, and supportive U.S. defense spending are expected to enhance revenue visibility [15][18]. - However, geopolitical factors and potential supply-chain disruptions present uncertainties that could affect performance [18].