LMT

Quick Report on Lockheed Martin (LMT)

Today we're going to take a closer look at large-cap Industrials company Lockheed Martin, whose shares are currently trading at $447.24. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

Lockheed Martin's Valuation Is in Line With Its Sector Averages:

Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 20.49 and an average price to book (P/B) ratio of 3.78. In contrast, Lockheed Martin has a trailing 12 month P/E ratio of 16.4 and a P/B ratio of 11.96.

Lockheed Martin's PEG ratio is 1.28, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Exceptional Profitability Overshadowed by Excessive Leverage:

2018-02-16 2019-02-08 2020-02-07 2021-01-28 2022-01-25 2023-01-26
Revenue (MM) $49,960 $53,762 $59,812 $65,398 $67,044 $65,984
Gross Margins 13.0% 14.0% 14.0% 13.0% 14.0% 13.0%
Operating Margins 13% 14% 14% 13% 14% 13%
Net Margins 4.0% 9.0% 10.0% 10.0% 9.0% 9.0%
Net Income (MM) $1,963 $5,046 $6,230 $6,833 $6,315 $5,732
Net Interest Expense (MM) -$651 -$668 -$653 -$591 -$569 -$623
Depreciation & Amort. (MM) -$1,195 -$1,161 -$1,189 -$1,290 -$1,364 -$1,404
Earnings Per Share $6.75 $17.59 $21.95 $24.3 $23.02 $21.48
EPS Growth n/a 160.59% 24.79% 10.71% -5.27% -6.69%
Diluted Shares (MM) 291 287 284 281 274 267
Free Cash Flow (MM) $7,653 $4,416 $8,795 $9,949 $10,743 $9,472
Capital Expenditures (MM) -$1,177 -$1,278 -$1,484 -$1,766 -$1,522 -$1,670
Net Current Assets (MM) -$29,891 -$27,324 -$27,262 -$25,294 -$20,099 -$22,623
Long Term Debt (MM) $13,513 $12,604 $11,404 $11,669 $11,670 $15,429

Lockheed Martin has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and just enough current assets to cover current liabilities. We also note that the company benefits from strong margins with a stable trend and exceptional EPS growth. However, the firm suffers from slimmer gross margins than its peers and high levels of debt.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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