Lockheed Martin Q2 sales beat amid moves to replenish weapons stockpiles

Overview

• U.S. defense contractor's Q2 sales rose 11% yr/yr, beating analyst expectations

• Net earnings and EPS rose sharply from prior year, reflecting absence of large program losses

• Company backlog reached record $230 bln, boosted by new multi-year THAAD contract

Outlook

• Lockheed Martin raises 2026 sales outlook to $79.75 bln-$81.75 bln from $77.5 bln-$80 bln

• Company lifts 2026 segment operating profit forecast to $8.5 bln-$8.7 bln from $8.425 bln-$8.675 bln

• Lockheed Martin now expects 2026 free cash flow of $7 bln-$7.2 bln, up from $6.5 bln-$6.8 bln

Result Drivers

• SEGMENT GROWTH - Sales rose across all segments, driven by increased production volumes and munitions ramps

• ABSENCE OF PRIOR-YEAR LOSSES - Net earnings and operating profit increased mainly due to the absence of large reach-forward losses recognized in the prior year

• MUNITIONS AND MISSILE DEFENSE - Higher sales in integrated air and missile defense programs (PAC-3, THAAD) and tactical missiles contributed to growth

Company press release: ID:nPn8HGXM4a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 14 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the aerospace defense peer group is "buy"

• Wall Street's median 12-month price target for Lockheed Martin Corp is $591.00, about 14.9% above its July 22 closing price of $514.36

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

• July 20 - Lockheed to make cheaper Patriot interceptors as air defense demand soars

• July 21 - Northrop Grumman raises 2026 forecasts on strong weapons demand

• July 23 - RTX lifts 2026 forecasts on aircraft repair, defense demand

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)