Key Takeaways
- Lockheed Martin shares declined 11.67% in the past week following disappointing first-quarter results
- First-quarter earnings per share reached $6.44, falling short of the $6.74 analyst consensus estimate
- Revenue totaled $18.02 billion, below the anticipated $18.38 billion
- The company reported negative free cash flow of -$291 million during the quarter
- Several Wall Street firms reduced their price targets while maintaining Hold ratings, with consensus near $635
- Full-year 2026 EPS guidance of $29.35–$30.25 remains unchanged despite quarterly weakness
Shares of Lockheed Martin experienced significant pressure throughout the week following the release of first-quarter 2026 financial results that fell short across multiple metrics.
Lockheed Martin Corporation, LMT
The aerospace and defense contractor delivered earnings per share of $6.44, trailing the Street consensus estimate of $6.74 and marking a decline from the $7.28 reported during the first quarter of 2025. Total revenue reached $18.02 billion, essentially flat compared to the prior-year period and below the $18.38 billion Wall Street projected.
The company pointed to calendar effects as a headwind: the first quarter of 2026 contained one fewer working week compared to the same period last year. This timing difference reduced revenue by several hundred million dollars.
Cash generation proved problematic during the period. Free cash flow registered at -$291 million, driven by margin pressures, working capital fluctuations, and challenges associated with fixed-price contracts.
New orders also disappointed, with the book-to-bill ratio landing at 0.6x for the quarter. Management attributed this to timing dynamics, though the figure added to investor concerns following the earnings release.
Wall Street Responds with Downward Revisions
The weaker-than-expected quarterly performance prompted numerous analyst firms to lower their price targets. RBC Capital reduced its objective from $650 to $575 while maintaining a Sector Perform rating, citing increased estimated costs at completion and uncertain near-term growth trajectories.
BNP Paribas Exane, Morgan Stanley, Deutsche Bank, and Susquehanna similarly lowered their price objectives. The Street consensus now stands at Hold, with the average target hovering around $635 — suggesting potential upside exceeding 25% from the current trading level near $510.
TD Cowen and TipRanks–xAI also issued Hold ratings with targets ranging from $575 to $600. The preponderance of neutral ratings, despite implied upside, contributed to continued selling pressure.
LMT began Friday’s session at $513.21. The shares currently trade beneath the 50-day moving average of $628 while remaining above the 200-day moving average of $553.
Strategic Outlook Remains Intact
Beyond the near-term quarterly challenges, Lockheed’s backlog and program lineup continue to provide visibility. The Department of Defense plans to increase F-35 procurement quantities through fiscal years 2030 and 2031, which should bolster production volumes in coming years.
The company secured a direct commercial sale with Peru for 12 F-16 Block 70 aircraft. Lockheed also won positions in multiple U.S. missile defense initiatives, including awards under the “Golden Dome” program, and received Department of Defense contracts aimed at replenishing Patriot missile stockpiles.
Despite the quarterly shortfall, management maintained its full-year 2026 earnings guidance, forecasting EPS in the range of $29.35 to $30.25. Analyst consensus for fiscal 2026 stands at approximately $29.97.
The company continues its quarterly dividend distribution of $3.45 per share, translating to an annual yield of 2.7%. The current payout ratio sits around 66.8%.
Vanguard Group reduced its stake by 17,369 shares during the fourth quarter while retaining ownership of 21.27 million shares. This position represents approximately 9.19% of outstanding shares and carries a value near $10.29 billion.
Institutional ownership accounts for 74.19% of total shares outstanding. The stock’s 52-week trading range extends from $410.11 to $692.00, with current levels positioned in the lower portion of that band.
RBC Capital’s recently adjusted $575 price target and Sector Perform rating represent the latest Wall Street action on the shares.
