Shares of Lockheed Martin (LMT, Financial) fell by 6.69% today, with the stock price reaching $435.50. This decline followed the news that Boeing (BA) secured a $20 billion contract to produce the F-47, the U.S. military's next-generation fighter jet.
Lockheed Martin, known for its F-35 and F-22 jets, was seen as a strong contender for the new contract. Challenges in the F-35 program, including production delays and cost overruns, may have influenced the Pentagon's decision. The F-35, regarded as the most expensive defense project in history, now carries an annual maintenance cost of $6.6 million per aircraft, contributing to a total program cost increase of 44% since 2018, reaching $1.58 trillion.
Despite this setback, Lockheed Martin's (LMT, Financial) F-35 program will continue generating revenue, with the U.S. planning to purchase up to 2,500 units by the 2040s. Additionally, Lockheed Martin can explore opportunities in other cutting-edge weapon systems.
From a financial perspective, Lockheed Martin's market capitalization stands at $102.51 billion, with a P/E ratio of 19.56. The company exhibits a strong Altman Z-score of 3.46, indicating good financial health. Lockheed Martin's dividend yield is near a three-year high, currently at 2.92%, and the PS Ratio is close to a three-year low of 1.57.
Furthermore, Lockheed Martin's stock is currently considered "Modestly Undervalued" with a GF Value of $533.31, suggesting potential upside for investors. While the insider selling activity has been noted, with three transactions involving 8,711 shares over the past three months, the company's financial strength and growth potential remain promising.
Investors should weigh these factors when considering Lockheed Martin as part of their portfolio, keeping an eye on the company's ability to innovate and manage production costs in the competitive aerospace and defense sector.
