Lockheed Martin (LMT) Stock Sinks As Market Gains: What You Should Know

Lockheed Martin (LMT) closed the most recent trading day at $350.23, moving -0.86% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.78%. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq added 1.44%.

Coming into today, shares of the aerospace and defense company had lost 13.53% in the past month. In that same time, the Aerospace sector lost 14.78%, while the S&P 500 lost 1.32%.

LMT will be looking to display strength as it nears its next earnings release, which is expected to be July 21, 2020. The company is expected to report EPS of $5.71, up 14.2% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.24 billion, up 5.6% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.05 per share and revenue of $63.51 billion. These totals would mark changes of +9.57% and +6.19%, respectively, from last year.

Any recent changes to analyst estimates for LMT should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. LMT is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, LMT is holding a Forward P/E ratio of 14.69. For comparison, its industry has an average Forward P/E of 14.76, which means LMT is trading at a discount to the group.

It is also worth noting that LMT currently has a PEG ratio of 2.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Aerospace – Defense was holding an average PEG ratio of 2.28 at yesterday’s closing price.

The Aerospace – Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 220, which puts it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.