Lockheed Martin Corp: Topline acceleration underway, cash flow starting to follow

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Lockheed Martin Corp: Topline acceleration underway, cash flow starting to follow

Global Research

24 July 2026ab

Lockheed Martin Corp Equities

AmericasTopline acceleration underway, cash flow

starting to follow Aerospace

12-month rating Neutral

12m price target US$581.00LMT and others in Defense will have to prove topline conversion

Prior : US$538.00

Revenue growth is building momentum - and we think still in early days - as strong

demand combines with actions to unlock supply chain capacity. Growth is led by Missiles Price (23 Jul 2026) US$568.59

& Fire Control, but looking healthy in other areas as well with a 3.2X book to bill in the RIC: LMT.N BBG: LMT US

quarter lifting backlog 38% yoy to a new record $230bn (2.8X revenue). LMT beat and

raised on topline, with some dropthrough to segment EBIT, with a sizable cash flow raise Trading data and key metrics

but driven by non-core factors (more on this below). Sentiment on Defense has been 52-wk range US$676.70-418.68

generally bearish with the two concerns we hear most frequently being 1) budget/ Market cap. US$131b

politics and 2) earnings/cash conversion. On the first, it may take getting past the Shares o/s 231m (COM)

midterms and seeing some true bipartisan support for national security. On the second, Free float 100%

it will take a track record of no charges and revenue dropping through to earnings/cash, Avg. daily volume ('000) 390

a dynamic that held back LMT and peers in the early/mid 2020s. We see a path to Avg. daily value (m) US$202

successful outcomes on both, and we are raising our FCF estimates, though Common s/h equity (12/26E) US$11.1b

LMT continues to face a few idiosyncratic FCF headwinds that limit growth until 2029, P/BV (12/26E) 11.9x

and budget uncertainty remains. We remain Neutral.