FORT WORTH, Texas, April 1, 2025 /PRNewswire/ -- Lockheed Martin (NYSE: LMT) today completed the delivery of the 51st and 52nd F-35As to the Royal Norwegian Air Force, making Norway the first F-35 partner nation to fulfill its program of record. Royal Norwegian Air Force F-35A "The F-35 is the world's best fighter jet and I am very pleased that we will receive the last of the 52 fighter jets from Lockheed Martin that Norway has ordered," said Tore O. Sandvik, Norwegian Minister of Defence. "The aircraft ens ...

Core Viewpoint - Boeing has been awarded a $20 billion contract to develop the Next Generation Air Dominance (NGAD) fighter jet, named the F-47, marking its return to the fighter jet business after a long absence [4][6][12]. Group 1: Contract and Development Costs - The NGAD program is expected to cost at least $16 billion for development alone, with total costs for a unit of one NGAD and three drones estimated at approximately $1.7 billion [3]. - Boeing has already invested $2 billion in preparation for the F-47, and the total development costs could exceed $50 billion [9]. - The contract awarded to Boeing is of the "cost-plus" type, which guarantees profit on top of development expenses, contrasting with the Pentagon's recent preference for fixed-price contracts [10]. Group 2: Market Position and Financial Implications - Boeing has struggled in the defense sector, having not won any contracts for stealth fighters or bombers in the past, with its defense division losing money for the last three years [5][10]. - The F-47 contract could significantly improve Boeing's financial outlook, with analysts predicting a return to profitability and positive cash flow by 2026, potentially rising to $7 billion in annual profit by 2029 [13]. - The anticipated influx of cash from the F-47 program could accelerate Boeing's turnaround, which has been under pressure due to ongoing losses in its commercial airliner business [13]. Group 3: Future Outlook - The first F-47 jets could enter service as early as 2029, earlier than previously expected [12]. - The success of the F-47 program may influence Boeing's strategic decisions, including the potential retention of its Defense & Space business, which was previously considered for sale [14][15].

Core Viewpoint - The recent contract awarded to Lockheed Martin by the U.S. Pentagon for missile production may not significantly impact the company's overall profitability despite the large contract value [2][5][10]. Group 1: Contract Details - The Pentagon has ordered Lockheed Martin to produce "Lot 23" of the Joint Air to Surface Standoff Missile (JASSM) and "Lot 9" of the Long-Range Anti-Ship Missile (LRASM) [2][3]. - The total value of the missile contracts is projected to be $5.2 billion, with the initial order amounting to $1.9 billion [4][5]. - Production lots for JASSM range from 550 to 810 missiles, while LRASM lots range from 120 to 240 missiles [4]. Group 2: Financial Impact - Lockheed Martin's defense business generated $71 billion in revenue last year, with profits exceeding $5.3 billion [6]. - The missiles' production is expected to contribute over $250 million to Lockheed Martin's annual profit, but this is likely to replace past orders rather than provide incremental profit growth [10]. - The company's missiles and fire control division (MFC) previously achieved a 13.3% operating profit margin, but faced a significant $804 million charge, leading to a 23% decline in annual profit for 2024 [7][8]. Group 3: Stock Valuation - Lockheed Martin's stock trades at 1.5 times trailing sales and has a price-to-earnings ratio of less than 20, which is considered somewhat expensive given the forecasted 13% long-term earnings growth [12]. - The company's free cash flow is approximately equal to its net income, resulting in a price-to-free cash flow ratio of 20 [12]. - Current valuations do not indicate a strong buy opportunity, leading to a cautious stance on Lockheed Martin stock [13].

Core Insights - Lockheed Martin and Google Public Sector are collaborating to integrate Google's generative AI into Lockheed Martin's AI Factory ecosystem, enhancing decision-making and innovation in national security, aerospace, and scientific applications [1][2][3] Group 1: Collaboration Details - The integration aims to improve Lockheed Martin's capabilities in training, deploying, and sustaining high-performance AI models, leveraging both open-source and proprietary AI models [2][4] - Google Cloud's AI technologies will complement Lockheed Martin's approach, providing tools for advanced intelligence analysis, real-time decision-making, predictive aerospace maintenance, and more [3][4] Group 2: Strategic Vision - Both companies share a vision to drive innovation in the industry through AI, with a focus on delivering reliable solutions that meet demanding challenges [3][4] - The collaboration emphasizes a commitment to trustworthy and secure AI deployment, adhering to high standards of security and reliability [4]

Core Viewpoint - Boeing has secured a significant contract from the Department of Defense, leading to a 3.1% increase in its stock, while Lockheed Martin's stock fell by 5.8% due to losing the contract [1] Boeing - Boeing has faced numerous challenges over the past five years, including the suspension of its dividend in March 2020 due to the COVID-19 pandemic and issues with the Boeing 737 Max, including a recent investigation revealing quality control problems [3][5] - The company anticipates a ramp-up in new aircraft versions and expects to reduce losses in its Defense, Space & Security segment, guiding for positive free cash flow (FCF) in the second half of 2025 [4] - Boeing's backlog has grown significantly, reaching $521 billion at the end of 2024, with 5,500 commercial airplanes ordered, indicating strong demand despite execution challenges [5] - Analysts project further losses in 2025, but expect a turnaround with earnings per share (EPS) of $4.23 starting in 2026, making the stock potentially attractive if the company can manage its backlog effectively [6] Lockheed Martin - Lockheed Martin is characterized by its profitability and a consistent dividend increase for 22 consecutive years, with a valuation of less than 20 times trailing earnings and free cash flow [7] - The company has experienced weak growth recently, highlighted by a disappointing quarter and guidance, leading to a 9.5% decline in stock year-to-date [8][9] - Lockheed's adjusted EPS guidance for 2024 is between $27 and $27.30, with a projected EPS of $29.75 in 2026, indicating modest growth of 6.3% compared to 2024 [9] - Unlike Boeing, Lockheed has a strong track record of managing its backlog and delivering profitable programs, such as the F-35 fighter jet [10] Investment Considerations - The choice between Boeing and Lockheed Martin depends on investment objectives and risk tolerance; Boeing presents higher risk with potential for greater rewards, while Lockheed offers stability and consistent dividends [11][12] - Boeing's balance sheet is weaker than Lockheed's, with a financial debt-to-equity ratio of 0.4 and a debt-to-capital ratio over 100%, suggesting a need for financial improvement before reinstating dividends [13]

Core Viewpoint - Boeing Co has secured a significant US Air Force contract for the Next Generation Air Dominance (NGAD) program, which is expected to be worth tens of billions of dollars over its multi-decade lifespan [1][2][3] Group 1: Contract Details - The contract is for the design, construction, and delivery of the sixth generation fighter jet, known as the F-47, and is valued at potentially $20 billion over the next five years [2] - This award marks a pivotal moment for Boeing, as it has not held the prime contractor role for a US fighter jet in decades [3] Group 2: Market Impact - Analyst Noah Poponak has maintained a Buy rating for Boeing with a price target of $213, reflecting confidence in the company's future prospects following the contract win [1][2] - Boeing's shares increased by 2.97% to $183.40 at the time of publication, indicating positive market sentiment [4] Group 3: Competitive Landscape - The loss of the contract for Lockheed Martin raises questions about its future offerings following the F-35, which currently constitutes approximately 25% of its earnings [3]

Core Viewpoint - Lockheed Martin (LMT) has faced significant downgrades from analysts, reflecting concerns over its earnings quality, competitive losses, and reduced growth expectations, amidst increasing capital outflows and a bearish stock sentiment [1][6][7]. Analyst Downgrades - Bank of America downgraded LMT from 'Buy' to 'Neutral', lowering the price target from $685 to $485, citing concerns over earnings quality and loss of key programs [6][7]. - Melius Research also downgraded LMT from 'Buy' to 'Hold', cutting the price target from $603 to $483, driven by competitive losses and concerns over reduced reliance on U.S. defense contractors in Europe [8][9]. Stock Performance - As of the latest report, LMT stock was down over 2%, trading at $429.70, with a year-to-date decline exceeding 10% [4]. - The stock is trading below its 50-day simple moving average of $461.43 and 200-day simple moving average of $512.87, indicating a bearish sentiment [4]. Competitive Landscape - Despite winning an $18 billion contract for the Next-Generation Interceptor missile defense, LMT has faced recent contract losses to competitors such as Northrop Grumman, Raytheon, and Textron, signaling headwinds for future growth [10]. - The loss of the Next Generation Air Dominance contract to Boeing, a $20 billion program, has contributed to recent volatility in LMT's stock [11][12]. Positive Outlook from Some Analysts - Truist Securities maintained a 'Buy' rating with a price target of $579, highlighting LMT's strong fundamentals and long-term growth potential despite recent challenges [11]. - Analyst Michael Ciarmoli noted that while the loss of the NGAD contract could have generated significant revenue, LMT's dominance in the aerospace and defense sector remains supported by its F-35 program and other defense contracts [12].

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].

Core Viewpoint - Lockheed Martin Corp (NYSE:LMT) stock has declined by 2.8% to $427.50 following downgrades from BofA Global Research and Melius Research, which changed their ratings to "neutral" and "hold" from "buy" respectively, and reduced the price target from $685 to $485 [1] Group 1: Analyst Ratings and Market Sentiment - Despite recent downgrades, 12 out of 22 analysts still rate LMT as a "buy" or better, with a 12-month consensus target price of $532.09, indicating a 23.5% premium over current levels [2] - The recent downgrades and price target cuts may lead to further downward pressure on Lockheed Martin's stock [2] Group 2: Stock Performance and Technical Analysis - LMT is trading below its 20-day moving average, which previously supported the stock during a failed attempt to surpass the $500 mark earlier this month [3] - The stock is on track for its third consecutive daily loss and has decreased by more than 26% over the past six months [3] Group 3: Options Market Activity - There is significant activity in the options market, with 3,217 calls and 1,181 puts traded, which is three times the typical volume for this time [3] - The most popular options contract is the weekly 3/28 450-strike call, indicating new positions are being opened [3] Group 4: Volatility and Performance Metrics - Defense stocks, including Lockheed Martin, have historically outperformed options traders' volatility expectations, as indicated by a Schaeffer's Volatility Scorecard (SVS) score of 97 out of 100 [4]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...