The Major CatalystS for This
Earnings Report on Tuesday, 26th January, 2021.....
Lockheed Martin will report before the market opens for the fiscal Quarter
ending Dec 2020.
The consensus EPS forecast for the quarter is $6.41. The reported EPS for
the same quarter last year was $5.29.
Consensus Estimate for the company’s fourth-quarter revenues stands at
$16.97 billion, indicating a 6.9% increase from the year-earlier quarter’s
The Aeronautics segment has been a major growth catalyst for this defense
contractor for decades. It primarily manufactures advanced, combat-proven jets
and comprises almost 40% of the company’s top line. With Lockheed Martin having
delivered a notable number of military jets in the fourth quarter, its
soon-to-be-reported quarterly results might reflect impressive numbers for the
Aeronautics business division.
During the quarter, the company delivered its 123rd F-35A conventional
takeoff and landing (CTOL) variant aircraft to the Italian Air Force, a program
that has been the primary contributor to the segment’s top line.
Lockheed Martin’s Missiles and Fire Control (MFC) segment, which provides
critical missile defense support to the United States and its foreign allies, is
expected to have delivered a strong operational performance.
During the quarter, Lockheed Martin and Aerojet Rocketdyne were together
poised to deliver missile interceptors for The Missile Defense Agency (MDA).
This is expected to have contributed to this unit’s growth in the fourth
quarter of 2020.
Lockheed Martin has short interest in the 87th percentile of S&P 500
stocks. It trades at 12.8 times 2021 earnings estimates, a 44% discount to the
Earnings estimates have been cut by 1.7% during the past three months,
putting the stock in the bottom 50% of the S&P 500. It’s a low “bar to
hurdle,” Emanuel says.
In December Lockheed announced plans to acquire Aerojet Rocketdyne Holdings
Inc., a solid rocket motor maker, for $4.4 billion, but that was just the tip
of the iceberg for the aerospace and defense giant. A raft of major procurement
contract awards were also announced last month, adding to an already impressive
year for Lockheed.
Lockheed won 32 procurement contracts in December, carrying a combined
value of $4.8 billion, including $2.4 billion in upfront cash. A solid haul by
any measure, 90% of the awards came from various branches of the U.S. military.
The lion's share of Lockheed's December contracts relate to the F-35
Lightning II next-generation fighter jet, including a massive $1.28 billion to
support international logistics and training and a further $900 million to fund
procurement of long-lead materials necessary to produce 133 aircraft. Smaller
awards related to the F-35 included $102 million to support flight services in
the United Kingdom and $97 million to support aircraft modification efforts.
Lockheed's jets were not the only winners in December. The company also
won a number of lucrative military helicopter contacts. The largest of these,
with a price tag of $507 million, consists of a modification of a prior deal
inked in 2017 with the U.S. Army to produce 257 Black Hawk medium-lift
The United Arab Emirates has signed an agreement
with the United States to purchase 50 F-35 jets and up to 18 armed drones.
Designed to serve as the new centerpiece of
U.S. and NATO warfighting strategy, a lot is riding on the F-35's success.
Official estimates have projected an annual cost of $12.5 billion for the F-35,
with the full program life-cycle cost expected to hit $1.1 trillion. That makes
the F-35 Lockheed's most lucrative, and most important, contract.
Lockheed was awarded nearly $2.4 billion in December to advance elements of
the F-35 program, including funds to procure a number of long-lead components
needed to produce a Pentagon order of 133 jets.
The company has been investing heavily into its space segment, making
multi-billion dollar deals to further dominate the hypersonic (missiles)
market. With a FY 2020 budget of $2.6 billion and a FY 2021 request of $3.2
billion, the hypersonic budget is one of the faster-growing investments on the
Lockheed landed a $4.93 billion deal from the Space and Missile Systems
Center at Los Angeles Air Force Base in California for three next-generation
geosynchronous Earth-orbiting space vehicles. In addition to building the
vehicles, Lockheed will provide software and support services.
LMT Space Systems Unit recently secured a $254.7-million follow-on
foreign military sales (FMS) contract for providing maintenance and sustainment
services for two Terminal High Altitude Area Defense batteries for the defense
forces of the United Arab Emirates (UAE). The contract has been awarded by the
Missile Defense Agency, Huntsville, AL.
Per the deal terms, Lockheed Martin’s maintenance and sustainment services
to UAE will include logistics management, logistics product database, training,
missile and ground repair, missile field surveillance program, alongside other
On Dec. 22, Credit Suisse reaffirmed its buy rating, upping it price
target from $400 to $409. Goldman Sachs, having wavered slightly on its highly
bullish call in September, has also come around, exuding confidence in the
aerospace and defense company's prospects in a year-end update.
Five equities research analysts have rated the stock with a hold rating and
twelve have assigned a buy rating to the stock. The stock presently has an
average rating of "Buy" and a consensus price target of $445.00.