When we last checked in with Lockheed Martin Corporation (NYSE: LMT), the defense stock was selling its fighter jets to Germany. Amid a historically profitable time for the sector, how has the stock fared?
Earlier this week, Lockheed Martin signed an agreement with Intel Corporation (NASDAQ:INTC) with the goal of advanced 5G communication for the U.S. and allied defense systems. In two weeks, Lockheed is set to first quarter earnings, with analysts currently anticipating a drop in earnings down to $6.23 per share. Looking at Lockheed's earnings history, the stock has moved lower after six of its last eight reports. Overall, LMT averages a post-earnings move of 4%, regardless of direction. For next Thursday, the options market is pricing in a smaller-than-usual 3.6% move for the defense stock.
LMT is up 30% in 2022, scoring a record high of $479.97 on March 7. While the shares have pulled back some since, their ascending 30-day moving average has stepped up to contain the damage. Don't expect a huge unwinding of pessimism though; less than 2% of the equity's total available float is sold short.
From a fundamental point of view, Lockheed Martin stock’s growth has exceeded the business’ output over the past year. Since fiscal 2020, revenues have increased just 2.5% and net income has decreased 8%. LMT also trades at a relatively high forward price-earnings ratio of 17.45 and a price-sales ratio of 1.84. In addition, it has a weak balance sheet with $3.6 billion in cash and $13.1 billion in total debt.
Nonetheless, Lockheed Martin’s revenues and net income are both up 25% since fiscal 2018. The company is also estimated to grow earnings by 17.8% for fiscal 2022 and by 4.9% for fiscal 2023. LMT offers a dividend yield of 2.41 with a forward dividend of $11.20. Still, revenues are expected to drop by 1.4% for fiscal 2022, making Lockheed Martin stock an unattractive stock investment at its current inflated valuation.
What's more, LMT boasts a Schaeffer's Volatility Scorecard (SVS) of 75out of a 100. This means the shares tend to outperform said volatility expectations.