Shares in US defence prime Lockheed Martin (LMT) soared $44 or 7.5% to a new all-time high of $641.50. The aircraft and missile systems maker posted better-than-forecast Q4 earnings and issued positive FY26 guidance.
| Share price: $641.50 (+7.5%) | PE: 27.8x |
| Market cap: $148bn | Yield: 2.2% |
FLYING HIGH
The defence group reported Q4 revenue of $20.3 billion, up 9.1% on the prior year and ahead of the consensus of $91.85 billion. It also posted better-than-expected EPS of $5.80 against a mean estimate of $5.75.
Performance was helped by continued strong demand for fighter jets and weapons systems as geopolitical tensions rise. Q4 sales for the aeronautics division, which builds the F-35 and F-22 fighters, rose 6.4% to $8.5 billion.
The company’s missile and fire control division, which makes the Patriot defence system, saw Q4 sales rise 17.8% to $4 billion. Even the firm’s space division saw positive growth with Q4 sales up 8% to $3.2 billion.
‘With a record $194 billion backlog, 6% sales growth and free cash flow generation above our expectation, 2025 marked a year of unprecedented demand’, said CEO Jim Taiclet.
For 2026, Taiclet predicted revenue of $77.5 billion to $80 billion against Wall Street expectations of around $78 billion. Earnings per share are forecast at between $29.35 and $30.25, against a mean estimate of $29.41.
Defence companies are coining it as continued geopolitical uncertainty forces countries to increase their military spending. Deliveries of the F-35 fighter reached 191 units last year, up from 110 units in 2024.
Also, domestic spending by the US on missile defence systems is bolstering Lockheed’s order book. The firm recently signed a 7-year deal with the DoD for 2,000 Patriot missile interceptors per year, up from 600 previously.
There was a wobble in defence stocks earlier this month when Trump ordered companies to stop paying dividends and buying back shares. However, the market guessed correctly he would back down and today the shares have powered to new highs.
Rather like the rallies in tech stocks and precious metals, the upward wave in defence stocks will only end when there is no marginal buyer. Until then, there seems to be little stopping stocks from continuing to post spectacular gains.
Read the press release here: https://investors.lockheedmartin.com/
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