LMT - Embedded Expectations Analysis - 2021 06 10
Lockheed Martin Corporation (LMT:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 15.9x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about free cash flow generation, F-35A production, and Space segment opportunitiesSpecifically, management may lack confidence in their ability to maintain current free cash flow, sustain Q1 operational and sales performance, and meet their raised EPS guidance. In addition, they may have concerns about the potential of LM Ventures tech investments and Skunk Works margin erosion. Furthermore, management may lack confidence in their ability to improve F-35A production, win more CH-53K customers, and grow Aeronautics segment sales through the rest of 2021. Finally, they may be overstating potential product demand from U.S. Intelligence and they make lack confidence in their ability to capitalize on Space segment growth opportunities
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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