Lockheed Martin Bags $231M Modification Deal

Lockheed Martin Corp. (LMT), an aerospace and defense company, recently secured a modification contract for integrating an additional 70 MK41 Vertical Launching System modules and ancillary equipment into DDG 51-class destroyers and FFG 62-class frigates. The award has been offered by the Naval Sea Systems Command, Washington, D.C.

Valued at $231.4 million, the contract is expected to be completed in July 2025. The modified services to be provided by Lockheed Martin include purchases of defense articles and services for the U.S. government (80%), the Commonwealth of Australia (13%), and Spain (7%), under the Foreign Military Sales program. The majority of the work related to the deal will be carried out in Baltimore, Md. and Indianapolis, Ind. (See Lockheed Martin stock chart on TipRanks)

On May 21, following a report by Bloomberg about the Biden administration’s request for 85 F-35 jets across all 3 variants, UBS analyst Myles Walton reiterated a Buy rating on the stock with a price target of $425, implying an upside potential of 11.9% from current levels.

Walton stated, “News of an inline request to the Trump budget request strikes us as the best initial outcome given the negative news on the program since the start of the year. We expect the total quantity procured for FY22 will be closer to 140-150 after international buys and Congressional adds,” indicating that this is likely to be good for the prospects of Lockheed Martin, which is the world’s largest defense contractor.

Consensus among analysts is a Moderate Buy based on 3 Buys and 2 Holds. The average Lockheed Martin price target of $426.6 implies an upside potential of 12.3% from current levels.

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