UBS Upgrades Lockheed Martin to Buy Amid Strong Earnings Growth Potential
UBS has upgraded its rating on Lockheed Martin (LMT) from neutral to buy, citing strong earnings growth potential that is not yet reflected in the stock price. Analyst Gavin Parsons highlighted expected revenue growth across key segments like missiles/munitions and F-35 sustainment, projecting a 9% compound annual growth rate through 2028. The firm raised its price target for LMT to $674 from current levels, implying over 28% upside. Despite geopolitical tensions such as the U.S.-Iran situation, Lockheed Martin's stock has only gained about 8% in 2026 and is down significantly from a March high. Parsons noted that while investors recognize missile growth potential, they have yet to fully price in faster production capabilities. The analyst also expressed increased confidence in LMT’s free cash flow generation despite higher capital expenditures. Currently, analysts are divided on the stock: 13 of 24 rate it hold, and another 10 recommend buy or strong buy ratings.
Tickers: $LMT
Topics: Defense Industry Earnings Growth Free Cash Flow Stock Analysis