LOCKHEED MARTIN CORPORATION specializes in the design, manufacture and marketing of aircraft, underwater and aerospace systems. Net sales are distributed by type of activity as follows:
- sales of aviation systems (39.6%): military and civil aircraft, primarily for government organizations;
- sales of electronic and tactical submarine systems (25.3%): avionics systems, radars, sensors, training systems and simulators, optical systems, surveillance and reconnaissance systems, simulation and training systems, etc.;
- sales of aerospace systems (18.2%): satellite systems, rocket systems and space transport systems;
- sales of defense systems (16.9%): air defense and missile defense systems, tactical missiles, precision strike weapons systems, fire control systems, etc. The Group also offers support services for intelligence operations, training, technical support, integration services, etc.
Net sales are divided by source of income into sales of products (83.7%) and sales of services (16.3%).
The United States accounts for 72.4% of net sales.
The fair value of the EV company is higher than the capitalization. The company has attractive multipliers. The P/E ratio for 2021 is 13.6x, well below the US market average of 23x. The company pays dividends of about 3% per annum. However, for every dollar invested, the investor receives only 10 cents in LMT assets. The company receives high revenues, the EV/Revenue multiplier is 1.56x. The margin generated by the company is stable and quite high of about 13%. Sales and pre-tax profits are projected to increase in the coming years.
The company has a stable financial position, Leverage (Debt / EBITDA) in 2021 is 0.62 x, there is a free cash flow of $6.619 billion, the asset utilization ratio ROA (Net Profit / Asset) is high and is 14.3%, and further growth is projected.
LOCKHEED MARTIN CORPORATION (LMT) has strong fundamentals. More than 70% of listed companies have a lower combination of growth, profitability, debt, and visibility criteria. In the short term, the company has interesting fundamentals.
Strengths of the LMT
There is a high visibility of the group's activities for the coming years. Forecasts for future earnings from equity-covering analysts remain unchanged. These grouped estimates represent highly predictable sales for the current and upcoming fiscal years. Historically, the company has released numbers that exceed expectations. The company has attractive profit multipliers. Analysts who evaluate this company mainly recommend buying shares in portfolios or increasing their shares.
Weaknesses of the LMT
LMT shares are close to their long-term resistance on the weekly time frame. Therefore, the growth potential may be limited. However, further bullish movement at the intersection of this resistance will be a positive signal. The underlying trend is negative on the weekly chart below the $362 resistance.
At the moment, the company's shares after forming support at 322, have formed a "double bottom" reversal pattern and are ready to recover with targets at 410 and 450, which together with dividends can provide investors with 40% growth in the next two to three years. In this regard, you can buy shares of the company for the above purposes and for up to 5% of the liquid capital. Investors should consider liquidating the position if the stock falls below the $250 level. In turn, traders, taking into account the closing of the last week above the level of 120 EMA, can count on the growth of the company's shares to the value of $410.
Be careful and follow the rules of money management.