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Will Lockheed stock rocket after Q4 earnings?

Will Lockheed stock rocket after Q4 earnings?

With tensions around the world appearing higher than they’ve been in years and with multiple high-intensity conflicts raging, many have held onto the belief that the U.S. defense stocks – key cogs in the machine commonly known as the “military-industrial complex” – will easily reach new all-time highs.

Indeed, in the final quarter of 2023, many elected officials – well-known as savvy investors due to either their uncanny abilities or access to insider information – have been heavily investing in these stocks.

One of these companies, Lockheed-Martin (NYSE: LMT) – perhaps best known to the millennial generation as the manufacturer of the AC-130U gunship thanks to the Call of Duty (CoD) video game franchise – is set to release its final fiscal 2023 earnings report on Tuesday, January 23.

Analyst expectations for Lockheed-Martin

As Finbold previously examined, 2023 has not been an entirely good year for defense stocks despite multiple ongoing conflicts with different levels of U.S. involvement. As a result, the companies achieved – on average – only middling results on the stock market

For example, Lockheed-Martin is 3.96% in the green in the last 52 weeks.

As a result, analyst forecasts for the company’s Q4 report show significant restraint. For example, the company is expected to report $18 billion in sales – $1 billion less than one year prior.

Similarly, the forecast earnings-per-share (EPS) also demonstrates that experts are cautious when it comes to LMT. This time, the company’s EPS is expected to come in at $7.29 compared to Q4 2022, when it stood at $7.79.

Lockheed Martin is also expected to have shrunk somewhat on the business side. For example, its aeronautics sector is expected to have reached net sales of $7.08 billion – approximately 7% less than one year before. Its rotary and mission systems area is also expected to have declined 6.6% to $4.49 billion.

Lockheed 12-month forecast

Just as with the Q4 report forecasts, analysts are firmly cautious when it comes to Lockheed-Martin’s likely 12-month prospects. Out of the 24 analysts taken into account by TradingView, as many as 20 rank the stock as a “hold.”

Additionally, 3 of them believe LMT is a “strong buy,” while 1 warns that investors would be wise to sell.

Analyst forecast for LMT. Source: TradingView

The average 12-month price target for the firms stands at $490.13 – a 6.84% upside compared to the latest close of  $458.76 – while some see it rising as high as $550 or falling as low as $384.

Technical analysis (TA) metrics compiled by TradingView paint a significantly more bullish picture and rank LMT as a “strong buy” in terms of moving averages, neutral when it comes to oscillators, and overall as a “buy.”

LMT technicals. Source: TradingView

Investors show pre-market optimism

Despite the cautious forecasts, investors appear optimistic when it comes to Lockheed-Martin’s report as the company’s shares have, by the time of publication, jumped 0.71% in Tuesday’s pre-market.

This indicates that should the Q4 report meet or exceed expectations, Lockheed is likely to experience a significant surge. On the other hand, should the firm’s figures come in weaker than expected, LMT might take a significant plunge.

Still, the company has been performing relatively well in recent weeks and months. 

In the last full trading day – Monday, January 22 – the company’s shares rose 0.22% to $458.76. The company is also slightly in the green since the start of 2024 – 0.58% – though the chart reveals significant stock market volatility.

LMT YTD price chart. Source: Finbold

Zooming further out, the slow but steady uptrend becomes more apparent as Lockheed rose 1.91% in the last 30 days and a total of 3.96% in the last 52 weeks.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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