Defense Stocks Continue To Play Offense (LMT Q1 FY12/24 Earnings Review)

Defense Stocks Continue To Play Offense (LMT Q1 FY12/24 Earnings Review)
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Lockheed Martin Q1 FY12/24 Earnings Review

Lockheed Martin ($LMT) printed a good quarter. Fundamentals improved somewhat with a modest acceleration in revenue growth (to +5% on a TTM basis), backlog up some 10% on prior year albeit down a touch sequentially, and leverage holding steady at 1.6x TTM EBITDA. None of this is the reason for the stock’s recent rise in my view. At present, defense stocks are undergoing an ascendancy en masse, a consequence of capital rotation into the sector since late 2023. Here’s how our Inner Circle Defense Model Portfolio has performed since inception on 24 January this year:

Despite all the good news in semiconductor … a handful of six defense names is ahead of the Nasdaq, the Dow and the Russell 2000 and only a touch behind the S&P in what has been a scorching year to date for the S&P. This for a model portfolio which was designed to protect capital rather than particularly to generate outsized returns.

Let’s now take a detailed look at LMT financials, valuation metrics, our stock rating and price targets.

Fundamental Financial Analysis