LMT - Embedded Expectations Analysis - 2018 09 07
Lockheed Martin (LMT:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.9x Uniform P/E. At these levels, the market has somewhat bullish expectations for the firm. However, management has concerns about the growth remaining in their F-35 aircraft line, and their ability to sustain recent financial outperformanceSpecifically, management may be concerned about the sustainability of substantial DoD budget cap expansion, and may have concerns about the impact of the recent ban on sales of F-35s to Turkey. Furthermore, they may be concerned about the remaining growth runway within the F-35 program going forward, particularly about continued modernization of the aircraft. They may also be concerned about the quality of data collected by their InSight robotic explorer on Mars, as well as their ability to meet their 3-year cash goal. Finally, they may lack confidence in their ability to sustain recent outperformance across all financial metrics, particularly operating profit in the RMS segment
Lockheed Martin is a security and aerospace company. The company has four segments: Aeronautics, which is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft; Missiles and Fire Control, which provides air and missile defense systems, logistics, fire control systems, and mission operations support; Rotary and Mission Systems, which provides design, manufacture, service and support for military and commercial helicopters, radar systems, and simulation and training services; Space, which researches, designs, develops, engineers and produces satellites, space transportation systems, and strategic, strike, and defensive systems.
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