Lockheed Martin’s Stock (NYSE:LMT) Continues To Underperform

Lockheed Martin's stock (NYSE:LMT) has underperformed this year, shedding 4.95% since the start of 2025, as competitors such as Northrop Grumman (NOC) and Rtx Corp (RTX) have carved out gains of 4%, and 21.87% respectively.

While the company continues to benefit from a robust backlog and sustained demand for its advanced weaponry and space systems, recent headwinds have created a mixed outlook for investors.

Over the past week, LMT has experienced a 4.5% drop. This recent downturn can be directly attributed to the U.S. Air Force's decision to slash its F-35 fighter jet order in half, from 48 to 24 units. This unexpected reduction, announced earlier in June resulted in a 4%+ drop in Lockheed Martin's stock price on June 11th.

The F-35 program, a cornerstone of Lockheed Martin's revenue stream, suddenly faces questions about its future growth trajectory. The recent award of a $250 million modification to an existing contract to continue production of the F-35 logistics information system (ODIN and MPE) provides a limited counterweight to this concern, but falls far short of offsetting the lost order volume.

However, it’s not all doom and gloom for the defense giant. The analyst consensus rating of “Moderate Buy,” with a consensus price target of $527.76, indicates that Wall Street remains cautiously optimistic about LMT's prospects. This target price represents a significant upside from the current trading level, suggesting potential for future growth if the company can weave it's way through the current challenges effectively.

Looking at recent financials, and LMT's first-quarter earnings, released in April, showcased some of the resilience that may be required. Lockheed Martin reported earnings per share of $7.28, significantly outpacing expectations of $6.34. Net income also rose to $1.71 billion, a solid increase on the $1.55 billion reported the previous year. These strong results were driven by sustained demand for Lockheed Martin's diverse portfolio of defense products, including missile systems and the ever-controversial F-35 fighter jet.

The completion of the Orion spacecraft for NASA's Artemis II mission, also in April, further highlights Lockheed Martin's continued success in the space exploration sector, adding to the company's diverse revenue streams.

However, the road ahead is not without its potential pitfalls. The sudden departure of CFO Jay Malave in April, followed by the appointment of Evan Scott, a company veteran, created initial investor unease, briefly causing a 5%+ pullback in the stock. While the stock has recovered since then, the leadership transition introduces an element of uncertainty.

For now, the stock remains an underperformer, and whilst the $250 million modification award is positive, it has not shifted sentiment. Bulls will be hoping for some more concrete developments in the days and weeks ahead.