Lockheed Martin (LMT) stock price is firing on all cylinders this year as it continues to outperform its key rivals. It surged to a high of $578.40 on Wednesday, bringing the year-to-date gains to 26.75%
RTX (RTX), formerly known as Raytheon, has done much better, rising by over 46% this year. The two companies have beaten their peers like General Dynamics, Boeing,Northrop Grumman, and BAE Systems, which is listed in the UK.
Lockheed Martin and the F-35 restart
Lockheed Martin’s share price has surged because of its strong financial results and the restart of F-35 deliveries.
The most recent financial results showed that Lockheed Martin’s sales jumped to over $17.2 billion, helped by its aeronautics division, which made over $6.8 billion.
Its missile and fire control’s revenue also continued rising, hitting a high of $2.99 billion while the rotary and mission systems jumped to $4 billion.
Lockheed Martin, like other companies in the industry, is seeing unprecedented demand as the geopolitical tensions rise globally. The United States is in a cold war-like scenario with China while Ukraine and Russia are in a protracted battle.
The same is happening in the Middle East, where Israel is battling Hamas and Hezbollah. Analysts warn that the situation could get out of control in the coming months.
As a result, countries are increasing their budget spending, a move that is benefiting firms in the military-industrial complex, of which Lockheed Martin is the biggest. Just recently, the company received a $1.3 billion order for javelins by the US Army. That order means that the company now sits on a backlog of over $160 billion.
Lockheed Martin stock is also doing well after the company restarted deliveries of the F-35 planes after a long pause because of the TR-3 upgrade issues. While this is a good development, the Pentagon has said that it will withhold $5 million out of an estimated $7 million for any F-35 plane that lacks the upgrade.
Analysts are optimistic about Lockheed Martin. The average estimate is that its revenue will be $15.8 billion in the current quarter while the annual figure will be $64.24 billion, a small drop from the $67.5 billion it made last year.
Some of the most bullish analysts are from RBC Capital, Bank of America, and Deutsche Bank who upgraded their rating recently.
However, there are concerns about its valuation. For one, its current price of $573 is higher than the average estimate of $494. The company has a trailing P/E multiple of 20.60 and a forward ratio of 19.
Lockheed Martin stock price analysis
Turning to the weekly chart, we see that the LMT share price has been in a strong bull run, as I predicted recently. Most recently, it crossed the important resistance point at $488.40, its highest point in April 2023.
The stock has remained above the 50-week and 100-week Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) and the Stochastic Oscillator have moved to the overbought point.
Therefore, while the stock’s outlook is bullish, a short-term pullback cannot be ruled out as traders start to take profits.
RTX is booming
Meanwhile, RTX stock has continued soaring even after the company was forced to pay a $200 million fine for export mistakes.
RTX is doing well, as evidenced by its quarterly results published in July. These numbers revealed that its sales rose by 8% in the second quarter to $19.87 billion, helped by the strong demand across all segments.
RTX’s backlog has continued soaring and stands at over $206 billion. Its sales figures were helped by its strong performance across all segments. Collins Aerospace’s revenue rose by 10% while Pratt & Whitney rose by 19% despite challenges with its engines. Raytheon’s sales rose by 4%, with its backlog hitting over $51 billion.
The company also continued returning cash to investors. It boosted its dividends by 7% and expects to return $37 billion through 2025.
Analysts expect that RTX’s revenue will be over $17.95 billion in the current quarter while its annual figure will be almost $72 billion.
Analysts at Bank of America and Alembic Global have boosted their ratings for RTX to buy and overweight, respectively.
RTX stock analysis
The weekly chart shows that, like LMT, RTX stock has been in a strong bull run for a long time. It also crossed the previous all-time high at $100 as the momentum continued.
RTX has remained above the 50-week and 100-week moving averages, meaning that bulls are in control. However, it has also become highly overbought, with the Relative Strength Index (RSI) rising to 74 and the Stochastic Oscillator moving to 95.
Therefore, since nothing goes up forever, there is a likelihood that the stock will have a small pullback as traders target the key point at $100.
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