Lockheed Martin Stock Rises 10.8% in 6 Months: More Upside Ahead?

Lockheed Martin’s LMT shares have risen 10.8% in the past six months, outperforming the Zacks Aerospace-Defense industry’s decline of 8.3%. The company continues to benefit from its large backlog and support from long-term munitions agreements, creating demand visibility. Image Source: Zacks Investment ResearchOther defense stocks like Northrop Grumman NOC boast a solid presence in defense and cybersecurity programs, with their product portfolio well positioned in high-priority categories. General Dynamics’ GD strong number of contract wins and broad global presence help maintain steady growth momentum. Shares of Northrop Grumman and General Dynamics have declined 3% and 1.7%, respectively, over the past six months.Considering Lockheed Martin’s outperformance relative to its industry, investors may be wondering whether now is a good time to add the stock to their portfolios. Let’s examine the factors that have driven the share price gains and assess the company’s investment prospects to make a more informed decision.Tailwinds for LMT StockIn May 2026, Lockheed Martin and Lithuania’s Ministry of National Defence have officially unveiled the country’s inaugural HIMARS launchers. The deal strengthens the company’s international defense backlog, expands long-term missile and launcher sales, and deepens its strategic position within NATO’s eastern side. Lockheed Martin continues to convert demand for key franchise programs into sizable awards, supporting revenue visibility over a multiyear horizon. The order flows, together with continued activity across strategic missile, combat systems and sustainment work, underpinned a backlog of $186.4 billion as of March 29, 2026. Management expects about 34% of backlog to be recognized over the next 12 months and about 58% over the next 24 months, supporting the long-term revenue base.The F-35 remains a central franchise program for Lockheed Martin’s Aeronautics segment, combining production, upgrades and long-duration sustainment work. The program represented about 27% of consolidated sales in the first quarter of 2026, and Aeronautics sales were partially supported by higher F-35 sustainment volume even as other aircraft programs faced timing headwinds.Lockheed Martin continues to see demand for integrated air and missile defense products, as well as tactical and strike missiles, while maintaining a broad global rotorcraft and combat systems footprint. It signed a $1.5 billion contract with the Peruvian Air Force for 12 Block 70 F-16 fighters, with an opportunity for a second squadron, further expanding its presence in Latin America.Challenges for LMT StockLockheed Martin continues to face execution and cost-estimate risk on complex programs, particularly where fixed-price elements magnify the impact of schedule and performance issues. In the first quarter of 2026, the company recorded unfavorable profit adjustments on the F-16 program due to production performance issues and development delays, as well as on the C-130 program due to ongoing integration challenges and delivery delays.Estimates for LMT StockThe Zacks Consensus Estimate for 2026 earnings per share (EPS) has risen 0.03% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 18.48%. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Northrop Grumman’s 2026 EPS has declined 0.39% over the past 60 days. NOC’s long-term earnings growth rate is 5.25%. The Zacks Consensus Estimate for General Dynamics’ 2026 EPS has increased 0.36% over the past 60 days. GD’s long-term earnings growth rate is 9.7%.LMT’s Earnings Surprise HistoryThe company beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 9.44%. Image Source: Zacks Investment ResearchLMT’s Debt PositionCurrently, the company’s total debt to capital is 73.43%, higher than the industry’s average of 48.64%.  Image Source: Zacks Investment ResearchLMT’s time-to-interest earned ratio at the end of the first quarter of 2026 was 6.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.LMT Stock Trades at a DiscountIn terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.46X, a discount to the industry’s average of 2.48X. This suggests that investors would be paying a lower price relative to the company’s expected sales growth compared with its peer group. Image Source: Zacks Investment ResearchWhat Should an Investor Do Now?Lockheed Martin is strengthening its global defense position through new international HIMARS and fighter aircraft partnerships, reinforcing long-term demand across missile systems, sustainment, and combat platforms. Its major defense programs, especially the F-35 and integrated missile defense systems, continue to support strong backlog visibility and expand the company’s presence across NATO and other international markets.Considering its financial pressures and higher debt levels, new investors should wait and look for a better entry point. Investors who already hold this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s strong earnings growth outlook.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks