get to Dom Chu. He's looking at some of the uh sectors and stocks on the move this morning. Hey, Dom.All right. So, Joe, Becky, in the wake of the uh Israeli air strikes on Iran, we wanted to give you a check on some of the safe haven trades that may react a little bit more in times of geopolitical risk and tension. Uh interestingly enough, uh visav the oil conversation you guys just had, that is where the real epicenter is.We are not seeing a lot of market activity. There is some activity in those safe hav ...

Group 1: Market Reaction - Several war stocks surged following the Israeli strike on Tehran, Iran [1] - U.S. stock futures dropped by 1.5%, while VIX futures increased by 13% [2] - Oil prices rose as much as 15% due to concerns over crude oil shipment issues, stabilizing around $72 with a 6% increase [2] Group 2: Company Performance - Lockheed Martin's F-35 and F-16 jets were deployed during the strike, indicating the company's dominance in tactical aviation [3] - Increased demand for Lockheed Martin's fighter jets is anticipated, especially after the retirement of the F-16C fleet [3] - Lockheed Martin also produces radar systems, smart ammunition, and missile defense platforms, enhancing its presence in the Middle East [3] Group 3: Related Companies - Northrop Grumman, known for stealth aircraft and global surveillance drones, is positioned to benefit from Lockheed Martin's increased footprint [4] - RTX Corporation could see long-term demand for engines, aerospace systems, and defense missiles used by Lockheed and NATO partners in the region [4] - In pre-market trading, RTX was up 6.01%, Lockheed Martin was up 4.20%, and Northrop Grumman was up 7.66% [6]

Group 1 - Lockheed Martin shares fell by as much as 7% after the Pentagon requested only 24 F-35s for the Air Force, a significant reduction from the previously projected 48 [1][2] - The Pentagon's request also included 12 F-35s for the Navy and 11 for the Marine Corps, down from 17 and 13 respectively [2] - The U.S. is Lockheed Martin's largest customer for the F-35, with plans to purchase a total of 2,456 aircraft over several decades, including 1,763 for the Air Force [3] Group 2 - A Lockheed Martin spokesperson emphasized the F-35's advanced capabilities and affordability, stating the company will work closely with the Administration and Congress during the budget process [4] - Congress has the potential to alter the Pentagon's reduced request, as lawmakers have previously funded more F-35s than initially requested [5] - The Pentagon's budget shift may reflect a reallocation of spending priorities, with Defense Secretary Pete Hegseth calling for an 8% cut in existing programs [6] Group 3 - Criticism of the F-35 program has emerged from some political circles, questioning its cost and relevance in light of rising drone warfare [7] - Lockheed Martin's CEO expressed intentions to enhance the F-35 using technology developed for a failed bid to produce a next-generation fighter, aiming to provide similar capabilities at a lower cost [8]

Company Performance - Lockheed Martin's stock closed at $456.60, reflecting a -4.26% change from the previous day, underperforming the S&P 500's loss of 0.27% [1] - Over the past month, Lockheed Martin shares have increased by 3.71%, which is lower than the Aerospace sector's gain of 8.18% and the S&P 500's gain of 6.9% [1] Earnings Forecast - The upcoming earnings report is expected to show an EPS of $6.58, representing a 7.45% decline compared to the same quarter last year [2] - Revenue is projected to be $18.59 billion, which is a 2.57% increase from the prior-year quarter [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $27.27 per share, indicating a -4.21% change from the previous year, while revenue is expected to reach $74.35 billion, reflecting a +4.66% change [3] - Recent adjustments to analyst estimates are important as they indicate short-term business trends, with positive revisions seen as a favorable sign for the business outlook [3] Valuation Metrics - Lockheed Martin has a Forward P/E ratio of 17.49, which is lower than the industry average Forward P/E of 23.2 [6] - The company has a PEG ratio of 1.66, compared to the industry average PEG ratio of 1.95 [6] Industry Ranking - The Aerospace - Defense industry, which includes Lockheed Martin, holds a Zacks Industry Rank of 65, placing it in the top 27% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Market Overview - Market faced uncertainty due to Middle East concerns and trade agreement details between the U S and China [1][2][4] - Economic data, including CPI figures, influenced market movements [3] - S&P 500 struggled to break record highs, remaining within a tight range [4][5] Sector Performance - Energy sector was the top performer, with oil prices surging almost 5% to over $68 per barrel [7] - Consumer discretionary and materials sectors experienced declines of more than 1% [7][8] Individual Company Highlights - Netflix expressed optimism despite trade uncertainties and potential tariffs, planning to invest over $1 billion in the UK over the next four years [9][10] - Goldman Sachs maintained a buy rating from Bank of America with a price target of $700, citing resilience in an uncertain environment [10] - McKesson raised its earnings forecast due to broad-based operational momentum, with Morgan Stanley maintaining an overweight rating and raising its price target from $745 to $770 [11][12] - Lockheed Martin shares dropped 42%, the biggest drop since April, after a report that the Air Force cut its request for F-35 jets [14] - Vera Bradley shares fell 19%, experiencing their worst day since the pandemic, and the company suspended its guidance and announced the departure of its CEO [17] Bond Market - Two-year yield decreased by about seven basis points, falling below 4% [19] - The 30-year bond auction is scheduled for tomorrow [20] Earnings Reports - Oracle's fourth-quarter adjusted EPS was $170 per share, exceeding expectations, with revenue also above estimates at $159 billion [22] - Oxford Industries' first-quarter adjusted EPS was $182, beating estimates by one penny, but its second-quarter outlook missed expectations [24][25] - Oracle expects cloud infrastructure growth rates to increase from 50% for its full year 2025 to over 70% in the full year 2026 [26]

Group 1: Lockheed Martin Corp (LMT) - Lockheed Martin's stock is experiencing a decline, down 5.4% to $451.30, following a U.S. Defense Department request for only 24 F-35 jets, a significant reduction from last year's forecast of 48 jets [1][2] - The stock is on track for a third consecutive daily drop and is trading below its 20-day moving average, with a potential support level at $440 [2] - Year-to-date, Lockheed Martin's equity has decreased by 6.5% [2] Group 2: Northrop Grumman Corp (NOC) - Northrop Grumman's stock is down 1.2% to $482.72, struggling to break through a resistance level at $500 [3] - The stock is testing support at its 20-day trendline but has a 12.3% gain over the last 12 months [3] Group 3: RTX Corp - RTX Corp's stock is up 1% to $139.84, following a price-target increase by Jefferies from $130 to $155 [4] - The stock had a record high of $141.12 before a slight decline and has gained over 20% year-to-date [4] Group 4: Options Activity - Lockheed Martin is seeing unusual options activity, with 13,000 calls and 6,763 puts traded, which is 2.5 times the typical daily volume [5] - The most active options contract is the July 520 call, followed by the January 2026 600-strike call [5]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Viewpoint - The reduction in the U.S. Pentagon's budget request for F-35 fighter jets is not expected to significantly impact Lockheed Martin's stock performance, despite a 5.5% drop in stock price following the news [1][5]. Group 1: Pentagon Budget Changes - The Pentagon has requested 24 F-35 jets for fiscal year 2026, down from the previously forecasted 48 jets, resulting in a $3.5 billion order [3][4]. - An additional $531 million has been requested for parts to build the next batch of F-35s, indicating ongoing production [3]. Group 2: Financial Impact on Lockheed Martin - The $3.5 billion reduction represents only a 5% decrease in expected revenue for Lockheed Martin, which generated $71 billion in business last year [5]. - The majority of the cuts are in orders for F-35A aircraft for the Air Force, with some reductions also affecting Navy F-35Cs and USMC F-35Bs [4]. Group 3: Future Opportunities - Lockheed Martin is positioned for potential contracts worth tens of billions for F-55 and upgraded F-22 aircraft, suggesting a positive outlook for the company despite current budget cuts [6].

Group 1 - Lockheed Martin's stock dropped nearly 6% to $448.70, extending weekly losses to over 7% due to concerns over the F-35 fighter jet program's future momentum [1][3] - The U.S. Air Force plans to cut its F-35 jet orders from 48 to just 24 jets in the upcoming fiscal year, as reported in a Department of Defense procurement document [3][4] - The proposed budget allocates $3.5 billion for the F-35 aircraft, a decrease from previous levels, and includes cuts to the Navy's F-35 carrier variant and the Marine Corps [4] Group 2 - Production of the F-35 has been slowed by delays in a key technology upgrade, with CFO Evan Scott indicating a finalized contract is expected in the second half of the year [5] - Lockheed Martin had previously projected two major contracts, with one anticipated in the first half of 2024 and another by the end of 2025 [5] - The defense sector is preparing for potential budget cuts under the Trump administration, with the Pentagon planning to reduce military spending by 8% over the next five years [6]

Company Overview - VPT, Inc. is a global provider of innovative DC-DC power converters and EMI filters for avionics, military, and space applications, serving organizations like NASA, Lockheed Martin, and Boeing [4] - VPT is part of the HEICO Electronic Technologies Group, which operates in niche segments of the aviation, defense, space, and electronics industries [5] Leadership and Expertise - Trevor Rice has joined VPT, bringing extensive technical background and decades of leadership in power conversion solutions, previously serving as Director of Sales at XP Power [1][3] - Rice's experience includes roles in engineering and sales at Luna Innovations, where he held multiple positions including Director of Business Development [2] Strategic Goals - Trevor Rice expressed enthusiasm about contributing to VPT's legacy in high-reliability power solutions and aims to work with the sales team to enhance customer value across North America [3] - Paul Andersen, former Vice President of North American Sales at VPT, highlighted Rice's addition as a reinforcement of the company's commitment to innovation and customer-focused solutions in the power electronics industry [3]