Lockheed Martin Shares: A Tale of Two Realities

Investors in Lockheed Martin are currently navigating a market defined by contrasting signals. On one hand, a routine technical adjustment is applying downward pressure on the share price. Concurrently, newly released industry data underscores the defense contractor’s dominant position in a sector experiencing record growth. This divergence highlights the central question facing the company: can its operational execution match the strength of its order book?

A Technical Pullback Masks Underlying Industry Strength

The stock is trading ex-dividend today. This mechanical adjustment lowers the share price to account for the upcoming $3.45 per share distribution, for which new buyers are no longer eligible. The dividend will be paid on December 30 to shareholders of record. On an annualized basis, the total dividend payout amounts to $13.80 per share, representing a yield of approximately 3.0%. This price movement is purely procedural and unrelated to the company’s fundamental business conditions.

SIPRI Report Highlights Record Defense Spending

The timing of this technical dip coincides with the publication of the annual report from the Stockholm International Peace Research Institute (SIPRI). The data reveals a robust and expanding global defense market:

• The combined arms sales of the world’s top 100 defense companies reached $679 billion, marking an increase of 5.9%.
• American corporations alone accounted for $334 billion of this total, a 3.8% rise.
• Lockheed Martin is identified as the industry leader and a primary beneficiary of this trend.

However, the SIPRI report also points to significant industry-wide challenges, including substantial production delays and cost overruns. Lockheed Martin’s F-35 program is specifically cited as a prominent example of these operational difficulties.

Should investors sell immediately? Or is it worth buying Lockheed?

Geopolitical Pressure on Taiwan Deliveries

A key program under scrutiny is the delayed delivery of F-16V fighter jets to Taiwan. The first test flights for these aircraft are now scheduled to begin before the end of December. Production is underway on 54 of the 66 ordered jets. For the U.S. government, this delivery carries high political sensitivity, and further setbacks could strain contractual and diplomatic relations.

Market Sentiment Remains Buoyant Despite Challenges

Recent regulatory filings show some institutional investors, such as HSBC Holdings and Distillate Capital Partners, have trimmed their positions. Nevertheless, the consensus price target among analysts remains around $515, suggesting notable upside potential from current levels. This optimistic outlook is supported by the company’s confirmed 2025 earnings per share forecast, which is set between $22.15 and $22.35.

The overarching issue for Lockheed Martin is whether it can resolve its production bottlenecks and cost management issues before the patience of its government clients and investors wears thin.