Lockheed Martin Shares Approach Peak Valuation Ahead of Earnings
28.01.2026 - 07:17:04
Investor focus is firmly on Lockheed Martin this week as the defense contractor's stock trades near record levels. The surge is underpinned by significant new contracts and robust performance within its flagship F-35 program. All eyes are now on the quarterly earnings report, scheduled for release before the market opens on Wednesday, with expectations set high.
The immediate catalyst for the stock's direction will be the Q4 2025 financial results. Consensus estimates project revenue of approximately $19.8 billion. Analysts forecast earnings per share to land between $6.16 and $6.38. Following a strong third quarter where the company exceeded projections, the bar is elevated.
An intriguing divergence exists in market sentiment: while the stock trades near the $600 mark, the average analyst price target sits at just $544. This suggests institutional investors may hold a more bullish outlook than the sell-side research community. Wednesday's report and, crucially, the guidance for 2026 will determine whether the rally continues or a period of consolidation begins. Given the stock's 23% advance since the start of the year, disappointing forward outlook could trigger profit-taking.
Key Contract Wins Provide Momentum
A substantial recent driver has been a new $130 million agreement with the Royal Australian Air Force. The contract, awarded to Lockheed Martin's subsidiary Rotary and Mission Systems, is for the modernization of the C-130J transport fleet.
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The scope of work includes:
* Training equipment for weapon systems
* Flight simulators
* Cockpit upgrades
Scheduled to run through the end of March 2030, this agreement secures medium-term revenue for the company's services division.
F-35 Program Demonstrates Operational Strength
Concurrently, the cornerstone F-35 program is showing impressive output. Lockheed Martin delivered 191 of the advanced fighter jets last year, a notable increase from the 142 units delivered the previous year. It is important to note, however, that nearly half of these deliveries stemmed from contracts deferred from the prior year, a delay caused by necessary hardware and software updates.
The upcoming earnings call will provide critical insight into whether this operational momentum can sustain the share price at its current heights.
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