Analyst: Lockheed shares could give up all of their gains from 2022

on Jan 16, 2023
  • Goldman Sachs analyst downgrades Lockheed Martin Corp to "sell".
  • Noah Poponak sees several headwinds that could weigh on the stock.
  • Lockheed shares have gained nearly 20% over the past three months.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

It’s time to pull out of Lockheed Martin Corp (NYSE: LMT) since the months ahead will likely be rough for the defense stock, says Noah Poponak. He’s a Research Analyst at Goldman Sachs.  

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Lockheed shares could lose 25% this year

Copy link to section

Poponak downgraded the aerospace and defense technology company in a recent note to “sell” and trimmed his price objective to $332 that represents about a 25% downside from here.

The defense budget has grown significantly to an all-time high level, and with a large level of cumulative U.S. government debt, focus on slowing spending growth or reducing it outright could return in 2023.

If true, the analyst added, Lockheed shares will particularly be at risk considering its rather huge exposure (75%). Over the past three months, this defense stock has gained nearly 20% making it a suitable time for investors to take profit.  

Lockheed Martin faces other headwinds as well

Copy link to section

Lockheed Martin is expected to report its Q4 earnings next week. Consensus is for it to earn $7.41 a share – up from $7.24 per share a year ago. But the Goldman Sachs analyst wrote:

Defense budgets, company earnings, and valuations are all near all-time highs, creating more downside risk, leaving stock prices vulnerable to medium-term de-rating. U.S. fiscal policy could increasingly become a downward pressure.

Halted F-35 deliveries, and uneven future growth in Blackhawk and OPIR also fed into his dovish view on Lockheed shares.

Poponak no longer expects the Bethesda-headquartered firm to note a meaningful growth in cash flow over the next few years. He’s not currently very constructive on the defense and aerospace industry at large.


Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
USA Manufacturing North America Stock Market World