Yahoo Finance Lockheed Martin In Holding Pattern Ahead Of U.S. Election
Lockheed Martin Corp. (LMT) is the world’s largest defense contractor, with the highly-popular but hugely-expensive F-35 fighter and THAAD anti-ballistic weapons system providing the fair share of total annual income. The blue chip manufacturer reported solid Q2 2020 earnings results last week, beating top and ottom line estimates while lowering fiscal year 2020 consensus as a result of supply disruptions, due to the COVID-19 pandemic.
Lockheed Martin Dependent On Military Contracts
The mega-cap depends on massive Congressional budgets to fulfill Pentagon wish lists, as well as lucrative foreign contracts with allied nations that include Israel, Saudi Arabia, and Japan. While Republicans have been recognized as military hawks for decades, defense budgets have rarely been reduced during Democratic administrations, lowering odds the November election will disrupt the nearly-continuous supply of new work orders.
Lockheed Martin named Jim Taiclet as CEO in June, succeeding Marillyn A. Hewson. Taiclet outlined company strengths, stating “I’ve seen first-hand much of the incredible work across this corporation providing the tools for a strong national defense and advancing scientific progress”. He then added a patriotic but self-serving note, remarking “it’s about doing something important for the frontline men and women that have to defend us. They deserve the best equipment, the highest technology, something better than our adversaries are going to have.”
Wall Street And Technical Outlook
Wall Street currently rates the stock as a ‘Moderate Buy’, calculated from 6 ‘Buy’ and 5 ‘Hold’ recommendations. No analysts are recommending that shareholders close out positions and move to the sidelines at this time. Price targets range from a low of $395 to a street-high $475 while shares are now trading $13 under the low target and $41 under the median $424 target. This humble placement bodes well for higher prices in coming months.
Lockheed Martin has been engaged in a strong uptrend since the first quarter of 2013, rallying more than 500% into February’s all-time high at 442. The stock failed a breakout above the 2018 high at 363 in the first quarter swoon but has now remounted that broken level, reinstating the bullish long-term outlook. While the rally could eventually lift well above the 500 level, the U.S. presidential election may limit gains between now and November.
This article was originally posted on FX Empire
