Lockheed Martin Wins $3.7 Billion Missile Contract; Street Sees 14.8% Upside


Lockheed Martin, together with partner, Aerojet Rocketdyne, has been selected by the Missile Defense Agency (MDA) to develop the Next Generation Interceptor missile defense system.

Lockheed Martin’s (LMT) vice president of Next Generation Interceptor Program, Sarah Reeves said, “We are excited and proud the MDA entrusted Lockheed Martin to lead the development of this game-changing system that will greatly improve our nation’s security for decades to come.”

Reeves further added, “We have been working toward supporting never-fail missions such as NGI for decades, and our team has the expertise and shared vision required to deliver on the MDA’s need to evolve GMD.”

The MDA plans to modernize the present ground based mid-course defense (GMD) system and this $3.7 billion contract is the first step in the process.

Notably, the NGI program was developed to protect the U.S. from intercontinental ballistic missiles and will be the first line of a layered missile defense architecture. (See Lockheed Martin stock analysis on TipRanks)

Recently, Cowen & Co. analyst Cai Rumohr gave the stock a Buy rating with a price target of $410 (16% upside potential).  Commenting on the company’s 2021 guidance, Rumohr said, “LMT faces administration change overhangs (program review, budget size, M&A policy) but 2021-22 prospects are intact with modest upside. This provides support for LMT’s 2.8% dividend yield with firepower for additional repo and/or M&A.”

Turning to rest of the Street, the stock has a Moderate Buy consensus rating alongside an average analyst price target of $405.83 (14.8% upside potential) based on 4 Buys and 2 Holds. Shares have rallied about 27.7% over the past year.

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