On Wednesday, RBC (TSX:RY) Capital adjusted its price target for Lockheed Martin (NYSE:LMT) shares, increasing it from $470.00 to $500.00, while keeping a Sector Perform rating.
The adjustment follows Lockheed Martin's second-quarter 2024 financial report, which surpassed consensus estimates. The defense contractor reported earnings per share (EPS) of $7.11, exceeding expectations by 10%. Additionally, the company's revenue for the quarter rose by 6%, reaching $18.1 billion.
The company's recent performance has been robust, as reflected by the approximately 6% rise in its stock price. Analysts at RBC Capital acknowledged the positive movement in the stock, prompted by the company's strong quarterly results.
The report highlighted several factors contributing to the positive outlook, including an uptick in sentiment towards Lockheed Martin and the broader defense sector, although the analyst noted that a significant shift in sentiment hasn't fully materialized yet.
Lockheed Martin's F-35 program has shown signs of improvement, which is a positive development for the company. Additionally, defense spending in Europe has been stronger than anticipated, contributing to the company's upswing. The firm also noted that Lockheed Martin's profit margins were a pleasant surprise in the recent quarter.
The maintained Sector Perform rating indicates that while the analyst recognizes the company's solid quarterly performance, they are not changing their long-term outlook on the stock at this time. The increased price target to $500.00 reflects the firm's recognition of the company's recent achievements and their potential impact on its valuation.
Lockheed Martin's performance in the second quarter of 2024, with higher-than-expected earnings and revenue growth, has been a key driver behind the revised price target. The defense sector, bolstered by increased spending and improvements in key programs like the F-35, continues to be an area of focus for investors and analysts alike.
InvestingPro Insights
Enriching the analysis of Lockheed Martin's (NYSE:LMT) second-quarter performance, InvestingPro data reveals several key metrics that further illuminate the company's financial health. The adjusted market cap stands at a robust $120.28 billion, and with a Price/Earnings (P/E) ratio of 18.16, the company presents a potentially attractive valuation relative to its earnings. Moreover, the P/E ratio adjusted for the last twelve months as of Q1 2024 is slightly lower at 17.36, suggesting a consistent earnings performance.
InvestingPro Tips highlight that Lockheed Martin has been demonstrating a strong commitment to shareholder value. Notably, the company has raised its dividend for 21 consecutive years and has been aggressively buying back shares, signaling confidence in its financial stability and future prospects. Additionally, with four analysts revising their earnings upwards for the upcoming period, there is an optimistic outlook on the company's ability to sustain its earnings momentum.
For investors seeking additional insights and analysis, InvestingPro offers a comprehensive list of tips, including information on the company's trading patterns, profitability, and debt levels. With these resources, investors can make more informed decisions. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for even more detailed insights.
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