Can Rising Ballistic Missile Demand Support Lockheed Martin's Growth?
Lockheed Martin LMT is strengthening its position in strategic missile systems as the U.S. Navy continues to modernize its ballistic missile capabilities. Through its Space business, the company is supporting the life extension of the Trident II (D5) missile, a key component of the U.S. strategic deterrence system.
Lockheed Martin recently received a $76.6 million contract modification for advanced design and development work under the Trident II D5 Life Extension 2 (D5LE2) program. The award supports continued development of upgrades designed to extend the missile system’s service life and maintain its capabilities over the long term. Work under the modification is expected to continue through September 2030.
The program highlights the long-term nature of demand for strategic missile modernization as the U.S. Navy seeks to maintain a reliable and effective sea-based deterrent. Continued investment in ballistic missile life-extension programs should support demand for Lockheed Martin’s engineering, development and production capabilities.
Lockheed Martin’s established role in the Trident II program also provides it with significant expertise in strategic missile technologies. This positions the company to benefit from ongoing modernization efforts as the U.S. government focuses on maintaining and upgrading critical strategic systems.
With sustained investment in ballistic missile modernization and its established position in the Trident II program, Lockheed Martin is well-positioned to benefit from long-term demand for advanced strategic missile capabilities. The company’s involvement in major life-extension efforts should also provide greater visibility into future opportunities in this market.
Defense Stocks to Keep on the Radar
Other defense companies benefiting from demand for advanced missile and strategic defense systems are discussed below:
General Dynamics GD: General Dynamics provides strategic weapon systems, submarine technologies and fire-control capabilities for the U.S. Navy. Its role in submarine modernization positions it to benefit from continued investment in strategic deterrence.
RTX Corporation RTX: RTX develops advanced missile, propulsion and guidance technologies for U.S. and allied defense programs. Continued investment in missile modernization should support demand across its defense portfolio.
The Zacks Rundown for LMT
Shares of LMT have risen 11.1% in the past year against the industry’s 13.8% decline.
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The company's shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.51X compared with its industry’s average of 29.17X.
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The Zacks Consensus Estimate for LMT’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
LMT stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
