Lockheed Martin Corporation (LMT) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Lockheed Martin Corporation (NYSE: LMT) stock jumped 0.45% on Friday to $422.08 against a previous-day closing price of $420.20. With 1.4 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.16 million shares. During the session, the Aerospace & Defense company that operates in wider Industrials sector, reached to the highest price of $424.72 whereas the lowest price it dropped to was $413.00. The 52-week range on LMT shows that it touched its highest point at $479.99 and its lowest point at $324.23 during that stretch. It currently has a 1-year price target of $459.32. With its current market cap of 111.72 billion, LMT has annualized dividend of $11.20 while the current yield stands at 2.65%. Beta for the stock currently stands at 0.66.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LMT was up-trending over the past week, with a rise of 2.05%, but this was down by -2.55% over a month. Three-month performance surged to 2.79% while six-month performance fell -5.20%. The stock gained 23.51% in the past year, while it has gained 18.76% so far this year. A look at the trailing 12-month EPS for LMT yields 17.29 with Next year EPS estimates of 27.95. For the next quarter, that number is 6.68. This implies an EPS growth rate of -7.10% for this year and 28.78% for next year. EPS is expected to grow by 9.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 13.50%.

Float and Shares Shorts:

At present, 265.80 million LMT shares are outstanding with a float of 264.95 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.54 million, which was 0.96% higher than short shares on Jun 14, 2022. In addition to Mr. James D. Taiclet Jr. as the firm’s Chairman, Pres & CEO, Mr. Frank A. St. John serves as its Chief Operating Officer.


Institutional Ownership:

Through their ownership of 76.26% of LMT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 40.76% of LMT, in contrast to 34.61% held by mutual funds. Shares owned by individuals account for 0.42%. As the largest shareholder in LMT with 14.52% of the stake, SSgA Funds Management, Inc. holds 38,494,398 shares worth 38,494,398. A second-largest stockholder of LMT, The Vanguard Group, Inc., holds 21,625,793 shares, controlling over 8.16% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LMT, holding 13,679,766 shares or 5.16% stake. With a 2.97% stake in LMT, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 7,880,151 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 1.99% of LMT stock, is the second-largest Mutual Fund holder. It holds 5,285,330 shares valued at 2.22 billion. American Funds Income Fund of Ame holds 1.65% of the stake in LMT, owning 4,373,742 shares worth 1.84 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LMT since 21 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 15 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LMT analysts setting a high price target of $539.00 and a low target of $374.00, the average target price over the next 12 months is $460.39. Based on these targets, LMT could surge 27.7% to reach the target high and fall by -11.39% to reach the target low. Reaching the average price target will result in a growth of 9.08% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LMT will report FY 2022 earnings on 01/24/2023. Analysts have provided yearly estimates in a range of $26.85 being high and $21.55 being low. For LMT, this leads to a yearly average estimate of $22.68. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Lockheed Martin Corporation surprised analysts by -$0.72 when it reported $1.16 EPS against a consensus estimate of $1.88. The surprise factor in the prior quarter was $0.23. Based on analyst estimates, the high estimate for the next quarter is $6.96 and the low estimate is $5.57. The average estimate for the next quarter is thus $6.67.

Summary of Insider Activity:

Insiders traded LMT stock several times over the past three months with 3 Buys and 5 Sells. In these transactions, 13,223 shares were bought while 12,768 shares were sold. The number of buy transactions has increased to 34 while that of sell transactions has risen to 36 over the past year. The total number of shares bought during that period was 51,620 while 54,225 shares were sold.

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