Lockheed Martin (LMT) Stock Forecast & Price Target

Lockheed Martin is supported by a durable defense-demand backdrop, a record $292B backlog, and broad-based order strength across Aeronautics, MFC, RMS, and Space that provides unusually strong revenue visibility. Its outlook is especially constructive because the 10-year F-35 framework largely de-risks the franchise, while F-35 sales grew 16% y/y in 3Q26 and MFC posted 24% y/y sales growth to $4.5B with backlog tripling to $142B, highlighting accelerating missile and sustainment demand. Although FCF will face pressure from capacity expansion and EAC watch items remain relevant, the portfolio’s mix of high-end and lower-cost programs, plus the Ultra Maritime acquisition, should support high-single-digit revenue growth and margin expansion through FY28.

Lockheed Martin is facing a negative fundamental setup because roughly $35.0B of sales through the first three quarters of FY26 were fixed-price contracts, leaving earnings exposed to cost overruns and unfavorable EACs in Aeronautics and MFC rather than customer pass-throughs. Its dependence on U.S. government funding and the F-35 is a major risk, since the government accounted for about $40.7B, or 69%, of sales and the F-35 represented about 27% of consolidated sales in both 3Q26 and 3Q25, while the loss of NGAD and FVL and non-participation in F/A-XX cloud the longer-term growth outlook. Elevated CapEx of $439M in 3Q26, $1.3B YTD, $559M of independent R&D, and about $1B of FY27 pension payments could pressure free cash flow despite FY26 guidance of $7.8B to $8.0B, and securities litigation around classified programs adds further execution and disclosure risk.