社区

Lockheed Martin stock is forming a base, but is LMT stock a good buy even as a key Pentagon decision on its top money maker remains in limbo? Take a look at $Lockheed Martin(LMT)$ earnings and the stock chart as of January 2021.

LMT Stock Fundamental Analysis

Lockheed reported strongthird-quarter results in October. Lockheed earnings from continuing operations rose 8.7% to $6.25 per share, beating analyst estimates by 18 cents. Revenue rose 10.2% to $16.4 billion, beating estimates for $16.34 billion.Lockheed now sees full-year EPS of $24.45, up from a prior view of $23.75-$24.25, on revenue of $65.25 billion, up from a prior view of $63.5 billion- $65 billion. Currently, analysts see full-year EPS of $24.13 on revenue of $64.76 billion. The defense contractor is set to release Q4 results on Jan. 26.

Management also expects 2021 revenue to meet or exceed $67 billion, below consensus views for $68.1 billion. Lockheed sees growth slowing down for key business units, predicting low-single-digit growth in aeronautics and missiles, down from Q3's pace. Meanwhile, cash from operations is seen at $8.1 billion in 2021, after pension contributions.

Lockheed has a 3-year EPS growth rate of 24% and a 3-year sales rate of 10%. Lockheed said that its 2020 and 2021 forecasts assume no significant work stoppages and supply chain disruptions from Covid-19 as well as the ability to recover costs from the federal government and that funding priorities don't change. Still, the defense contractor delivered just 123 F-35 fighters in 2020, under its goal for 141. Much of its revenue growth has come from sales of the F-35 fighter. The stealthy fighter jet is the most expensive weapons program in Pentagon history, with a procurement price tag of about $400 billion, and is Lockheed's biggest revenue generator.

F-35 fighter

Technical Analysis For LMT Stock

LMT stock has CAN SLIMfundamental metrics that include a 49 out of a best-possible 99IBD Composite Ratingand an EPS Rating of 94 out of 99. Lockheed is ranked 2oth in IBD's Aerospace/Defense group.

After selling off in March 2020, Lockheed stock is now forming a saucer base with a 402.48 entry point, according toMarketSmith analysis. The stock tumbled below its50-day and 200-day linesas the Covid-19 pandemic rattled the overall market. After finding resistance at those key levels in November, LMT stock has been falling away from them as it heads into 2021.

Therelative strength line, another key indicator, is at a five-year low, meaning Lockheed stock has been badly underperforming the broader market.The Accumulation/Distribution ratingis now at E, indicating that there is net selling of the stock on the part of institutional investors. Still, the number of funds holding shares has inched up, climbing to 2,053 at the end of Q3, up from 2,042 in Q2 and 2,032 in Q1.

Bottom Line On LMT Stock

Lockheed is part of the aerospace/defense group, and its earnings growth is solid, if not spectacular.

The massive Pentagon budget continues to enjoy bipartisan support in Congress, though the pandemic and oil price crash loom over prospects for foreign sales.

Bottom line: LMT stock is not a buy. Shares are forming a base but haven't yet reached a buy point. The stock is underperforming the broader market. Growth is expected to slow in the coming year as well, though the company is leading in key weapons development priorities.

source: IBD

$Lockheed Martin(LMT)$