Insight Guru Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 20:51
Is Lockheed Martin Stock Priced Right Against Its Peers
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Lockheed Martin (LMT) keeps more of its sales as operating profit than four of its five aerospace and defense peers, tying the fifth, RTX. The stock returned 25.1% from November 3, 2025 to November 4, 2026, the best in the group. Yet on price against earnings, Lockheed ranks only fourth of the five companies with a usable P/E. If not the margin, what are investors paying for in this group?
Lockheed Martin Ranks Fourth On Both Growth And Price
Investors in this group appear to pay for sales growth more than for margin. On growth, Lockheed also ranks fourth of six companies. RTX shows the contrast most sharply. Over their latest four quarters, both companies kept 11.8% of sales as operating profit, yet investors pay 31.9 times earnings for RTX against 21.1 for Lockheed. One difference between the two is sales growth: RTX grew revenue 11.6% over that period, against 7.9% for Lockheed.
| LMT | NOC | RTX | BA | GD | LHX | |
|---|---|---|---|---|---|---|
| Four Fiscal Quarters | ended 2026-09-27 (Q4 FY2025 to Q3 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) | ended 2026-10-04 (Q4 FY2025 to Q3 FY2026) | ended 2026-10-02 (Q4 FY2025 to Q3 FY2026) |
| Market Value (USD billion) | 137 | 74.7 | 268 | 140 | 98.6 | 47 |
| P/E | 21.1 | 16.5 | 31.9 | 18.3 (not in the P/E rank) | 21.2 | 23.2 |
| Revenue Growth | 7.9% | 6.5% | 11.6% | 17.5% | 9.7% | 7.3% |
| Operating Margin | 11.8% | 10.6% | 11.8% | -0.174% | 10.4% | 10.7% |
| Total Return, Incl. Dividends, 2025-11-03 to 2026-11-04 | 25.1% | -7.2% | 13.7% | -13.5% | 8.7% | -8.5% |
Data as of 11/4/2026. Revenue growth, operating margin and the net income in the P/E are for each company's four fiscal quarters in the first row; revenue growth is against the four quarters before. A P/E marked "not in the P/E rank" belongs to a company whose net income was below zero in at least one of those four quarters.
Most of the rest of the group fits the same pattern. General Dynamics grows faster than Lockheed and trades at a slightly higher P/E, while Northrop Grumman grows slower and trades lower. Only L3Harris is priced above Lockheed with slower growth.
Where Lockheed Martin's Sales Growth Comes From
In 2025, Lockheed's missiles business, Missiles and Fire Control, grew sales 13.6% to $15.3 billion. Its largest business, Aeronautics, which makes the F-35 jet, grew more slowly, up 5.7% to $30.6 billion.
Lockheed's growth over the past four quarters includes a first quarter of fiscal 2026 in which sales barely rose from a year earlier. Sales then grew 10.5% in the second quarter and 11.3% in the third. Management said every segment grew in the third quarter, and sales at Missiles and Fire Control rose 24%.
Lockheed also ended the third quarter with a record $292 billion backlog, the orders it has yet to turn into sales. That is up $113 billion from a year earlier. The largest addition in the quarter was a seven-year contract for PAC-3 interceptors.
Lockheed Martin's Sales Forecasts For 2026 And 2027
On October 22, management raised its 2026 sales forecast to a midpoint of $81 billion, from $80.8 billion in July. Management said that midpoint means growth of about 8% for the year. For 2027, management will give a forecast in January, but said on the call that it sees high single-digit revenue growth, with all four segments growing.
The risk is in Lockheed's largest business. Management lowered its 2026 outlook for Aeronautics slightly from July, because it changed its expectations for when the next F-35 contracts will be awarded. Separately, Lockheed and the Pentagon have struck an initial deal to produce 850 F-35 jets. Management said on the October 22 call that the agreement sets a path to 850 U.S. aircraft over 10 years.
At a P/E below RTX's, the price appears to assume Lockheed keeps growing at about the pace of its past four quarters, slower than its fastest peers. Investors appear to pay nothing extra for its margin. Management's own 2027 outlook of high single-digit growth is close to that pace, though sales grew faster in the last two quarters and the backlog is far larger than a year ago. Lockheed Martin's 2027 sales guidance is the number to watch. The stock fell 6.9% on November 4, after midterm results gave Democrats control of both the Senate and the House and raised fears of a smaller defense budget.
Beyond LMT: A Systematic Way To Invest
Before you decide on LMT, consider a better choice. Since its September 2020 launch, the Trefis High Quality (HQ) Portfolio has returned 105%, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000, without betting on one stock.
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Insight Guru Inc. published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on November 06, 2026 at 02:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]