LMT - Embedded Expectations Analysis - 2021 03 11
Lockheed Martin Corporation (LMT:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 14.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about growth investments, product development, and marginsSpecifically, management may lack confidence in their ability to invest in strategic growth for their business, maintain their liquidity position, and sustain Aeronautics segment growth. In addition, they may be overstating the capabilities of their hypersonic missiles and the potential of their successor to advanced evolved strategic satellite (ESS) communication systems. Furthermore, management may have concerns about the impact of payroll tax deferral under the CARES Act and their FAS/CAS pension adjustments. Finally, they may be concerned about the dilutive impact of the Missiles and Fire Control segment on margins and proposed shifts to fixed-price incentive and fixed-price contracts
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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