Known as one of the world's leading military contractors, Lockheed Martin is a global security company focused on the research, design, and development of technologically advanced products and services. The company operates in several key areas including arms, aerospace, defence, information security, telecommunications, and electronics.
Despite a slight slowdown in FY22 (revenue: -1.6%), the company has experienced decent top-line growth over the past few years (compounded annual growth of ~6% since 2017), underpinned by robust contract activity, particularly from the US government. Disciplined cost control and continued operational enhancements remain key to the company's overall profitability and performance.
Technically, the stock is trading within an incomplete rising wedge pattern, characterised by two upward sloping trend lines that are converging based on a series of higher highs and higher lows in the price. Given that the stock has failed to break below the lower of these two trend lines, we expect underlying strength in the bullish trend to persist.
The stock is trading just below its 200-day simple moving average (SMA) of ~$463. A sustained break above this level will be a strong positive signal.
Fading downside momentum, according to the MACD indicator and the formation of a trough on the Coppock Curve, support our bullish stance. Downwards movement of the On-Balance Volume indicator, though, is a concern.
Share Information
| Share code | LMT US |
|---|---|
| Industry | Capital Goods |
| Market Capital (USD) | 113.97 billion |
| One year total return | 5.87% |
| Return year-to-date | -5.76% |
| Current price(USD) | 452.55 |
| 52 weeek high(USD) | 508.10 |
| 52 week low(USD) | 381.55 |
| Financial year end | December |
| Closing paragraph | The stock has experienced moderate price fluctuations over the past year. This is expected to continue going forward, with the overall trend remaining bullish. |
Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 27.23 | 27.78 | 28.49 | 28.70 |
| Growth (%) | 2.02 | 2.56 | 0.71 | |
| Dividend Per Share (USD) | 11.40 | 12.79 | 13.63 | 13.94 |
| Growth (%) | 12.17 | 6.62 | 2.21 | |
| Forward PE (times) | 16.29 | 15.88 | 15.77 | |
| Forward Dividend Yield (%) | 2.83 | 3.01 | 3.08 | |
| Closing paragraph | The market anticipates soft growth over the medium-term. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
IEX - BUY (Continue to hold) |
BTAL - BUY (Continue to hold) |
STRA - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 212.62 | 19.20 | 76.64 |
| Current | 222.69 | 19.49 | 77.68 |
| Movement | 4.7% | 1.5% | 1.4% |
| Summary text |
The price remains above key support and just crossed above its 200-day simple moving average. Upside momentum has regained strength.
Our profit target is $240 with a trailing stop-loss of $213. Exit the position around 20 October 2023. |
The falling wedge pattern remains of interest. The stock is trading below its 200-day simple moving average, though upside price momentum remains supportive.
Our profit target is $21 with a trailing stop-loss of $18.50. Exit the position around 13 December 2023. |
The accumulation phase of the stock has persisted, and it is just below the 200-day simple moving average. Upside momentum remains supportive.
Our profit target is $85 with a trailing stop-loss of $73.5. Exit the position around 22 November 2024. |
| Share Name and position |
FOXF - Buy (Continue to hold) |
HUM - BUY (Continue to hold) |
VOE - Buy (Continue to hold ) |
|---|---|---|---|
| Entry | 105.69 | 488.74 | 137.42 |
| Current | 105.92 | 484.19 | 135.61 |
| Movement | 0.2% | -1.25% | -1.32% |
| Summary text |
A price making higher highs and higher lows remains of interest. The stock is testing its 200-day and -week simple moving averages. Upside momentum remains halted, which is a concern.
Our profit target is $126 with a trailing stop-loss of $97.70. Exit the position around 6 October 2023. |
The price action appears to be in a steady uptrend, which remains of interest. The stock remains just below the 200-day simple moving average. Upside price momentum continues to support the trade.
Our profit target is $549 with a stop-loss of $465. Exit the position around 13 October 2023. |
The ETF is in a symmetrical triangle pattern with trade continuing just above the 200-day simple moving average. Fading upside momentum is still a concern.
Our profit target is $148 with a stop-loss of $134. Exit the position around 15 September 2023. |
