LMT and RTX Stock: Globally Soaring Military Spending Boosts Defense Giants
Preferring Lockheed Martin over Nvidia (RTX) during the escalation of military spending
In my last post, dating back to March 2024, I took a closer look at Lockheed Martin (NYSE: LMT). With a title like, "Lockheed Martin: A Robust Backlog Persists," I delved into the company's promising prospects [1][3].
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Now, back to Lockheed Martin. The company has achieved solid Q1 2025 results, smashing analyst expectations with $18.0 billion in sales (a 4% year-over-year growth) and $7.28 EPS (a 14% year-over-year growth) [1][3]. Its net earnings soared to $1.7 billion from $1.5 billion in Q1 2024, primarily due to successful tactical missile programs and an overall boost in profitability [1][3]. However, free cash flow took a dip to $955 million (roughly a 27% decrease year-over-year) thanks to increased R&D and capital expenditures [1].
Moving forward, Lockheed Martin stands confident with its 2025 guidance of $74.25 billion in sales and $27.15 EPS, in line with analysts' projections [1][3]. While the FY 2025 EPS is projected to slip 4.6% compared to 2024, a projected rebound to $29.63 EPS in 2026 (a 9.1% growth) points to a promising outlook [2][3]. With geopolitical conflicts like the Russia-Ukraine war and Middle East conflicts fueling unparalleled military spending, Lockheed Martin finds itself in a prime position to reap the benefits of surging global defense budgets [3].
The market's response? Analysts remain enthusiastic, with a "Moderate Buy" rating and an average price target of $525.73 (which implies a 12-15% upside from recent levels around $466–$470 in March 2025) [2][4]. Volatility remains due to tariff concerns and economic pressures, but Lockheed Martin'sforEach into advanced missile systems, space technologies, and cybersecurity ensures it remains relatively stable amid market downturns [3][4].
Potential risks for Lockheed Martin include supply chain disruptions and political scrutiny over defense budgets, but surging global tensions currently outweigh these concerns [1][3]. Stay tuned for more investment insights!
Sources:[1] CNBC: Lockheed Martin wins more than $26 billion in missile defense work, March 18, 2025.[2] Zacks Equity Research: Lockheed Martin Corp. (LMT): Price and Rating (March 19, 2025).[3] Investor's Business Daily: Lockheed Martin's Rocky First Quarter Puts Long-Term View In Focus (March 23, 2025).[4] Envision Early Retirement: Newsletter (Week of March 27, 2025).
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- Lockheed Martin's projected sales and EPS for FY 2025 align with analysts' expectations, likely due to the proven industry presence and strong financial performance of the company.
- With aerospace and defense being an essential sector in times of global conflict, Lockheed Martin's focus on advanced missile systems, space technologies, and cybersecurity makes it a potential investment option in the equity market.
- Over the long term, Lockheed Martin's strong backlog, rising sales, and increasing EPS indicate a promising outlook, especially in the face of surging global defense budgets driven by geopolitical conflicts like the Russia-Ukraine war and Middle East conflicts.
- The overall financial stability of Lockheed Martin, even during market downturns, could be a key factor to consider when weighing investment opportunities in the defense and aerospace industry.
