Key Factors
Lockheed Martin had a strong quarter supported by power in all segments. 
The wholesome stability sheet helps sturdy capital returns, together with dividends and share-reducing buybacks.
The corporate reaffirmed steering, which can be overly cautious in gentle of geopolitical battle and protection spending. 
5 shares we like higher than Lockheed Martin
Lockheed Martin’s NYSE: LMT inventory worth has trended greater for years, supported by sturdy protection spending and, extra not too long ago, battle in Ukraine and the Center East. The takeaway from the Q1 2024 earnings report is that enterprise is sweet, excellent, and that steering is cautious. The Q1 outperformance could also be a one-off; it could not persist by way of the 12 months’s finish, but it surely certainly suggests in any other case. 
Inside metrics present power within the two segments whose merchandise are most disposable: Rotary & Mission Methods and Missiles & Hearth Management.  Helicopters aren’t meant to be disposable, however missiles, drones, and logistics methods are. As a result of there isn’t a foreseeable finish to the conflicts driving want, buyers ought to count on to see Lockheed Martin exceed steering, if not enhance it, because the 12 months progresses. Different causes to suspect outperformance embrace the newest US support package deal to Ukraine and Israel, value $95 billion if handed.  Get Lockheed Martin alerts:Signal Up
Lockheed Martin has a Robust Quarter. All Segments Outperform
LMTLockheed Martin$459.13 -0.95 (-0.21%) (As of 04/24/2024 ET)52-Week Vary$393.77▼$480.92Dividend Yield2.74percentP/E Ratio16.67Price Goal$475.80
Lockheed Martin had a strong quarter with power in all segments. The corporate produced income of $17.19 billion, a acquire of 13.8% over final 12 months. The highest line contains the impression of an additional a13th week however nonetheless outpaced the consensus by 750 foundation factors. Missiles & Hearth Management was the strongest section, at 25%, adopted by a 16.5% enhance in Rotary & Missions Methods, a ten.5% enhance in Area, and a 9.2% enhance in Aeronautics. The corporate highlighted Area’s power, declaring its significance in advancing safety options. 
Margin contracted in comparison with final 12 months however as a consequence of funding in manufacturing functionality and R&D of superior merchandise. Regardless, the web earnings of $1.5 billion and FCF of $1.3 billion are roughly flat in comparison with final 12 months, permitting the corporate to keep up its wholesome stability sheet whereas repurchasing shares and paying dividends. The information is that adjusted earnings of $6.33 beat Marketbeat’s reported consensus by $.47 or 800 foundation factors, which aligns with the concept that steering is cautious. Lockheed Martin reaffirmed its steering for 2024. The corporate expects income and earnings in a spread that aligns with the analysts’ consensus however solely about 2.5% income progress in comparison with the strong double-digit produced in Q1. The backlog additionally aligns with the concept that the steering is cautious. The backlog grew by 10% to $159.4 billion, or sufficient to maintain operations at Q1 ranges for greater than two years. 
Lockheed Martin Capital Returns are On-Goal
Dividend Yield2.74% Annual Dividend$12.60 Dividend Enhance Observe Record21 Years Annualized 3-Yr Dividend Growth7.43% Dividend Payout Ratio45.74% Latest Dividend PaymentMar. 29 See Full Particulars
Lockheed Martin carries debt and leaned into this quarter, issuing sufficient for $2 billion in internet proceeds, however it isn’t a purple flag. The debt is to assist maintain progress. Steadiness sheet highlights embrace a construct within the money place regardless of dividends, share repurchases, and CAPEX spending. Highlights additionally embrace a construct of present and complete belongings. The leverage ratio stays low at 2.9X shareholder fairness. 
The dividend is wholesome and dependable. The two.75% distribution yield is about 44% of the earnings outlook, and funds are rising. The corporate has elevated for twenty-one consecutive years and is on monitor for #22 this summer season. Share repurchases are sturdy and decreased the diluted depend by a mean of 5.5% on the finish of Q1. 
The Technical Outlook for LMT Inventory Bullish with a Likelihood of New Highs
LMT inventory is trending greater and transferring upwards following the Q1 launch. The motion is gentle however aligns with the pattern and should result in greater costs over the subsequent few weeks and months. Nonetheless, there are indicators of resistance close to $467, so beneficial properties could also be capped. If the market can’t exceed that stage quickly, it might maintain transferring sideways till it reaches the long-term uptrend later this 12 months. If the market can maintain upward motion now, the subsequent goal for vital resistance is close to $475 after which $500. MarketBeat retains monitor of Wall Road’s top-rated and finest performing analysis analysts and the shares they advocate to their purchasers every day. MarketBeat has recognized the 5 shares that high analysts are quietly whispering to their purchasers to purchase now earlier than the broader market catches on… and Lockheed Martin wasn’t on the listing.Whereas Lockheed Martin at the moment has a “Maintain” score amongst analysts, top-rated analysts consider these 5 shares are higher buys.View The 5 Shares Right here Questioning while you’ll lastly be capable to spend money on SpaceX, StarLink, or The Boring Firm? Click on the hyperlink beneath to study when Elon Musk will let these corporations lastly IPO.Get This Free Report