Buy GE or LMT?


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Lockheed Martin (LMT) is the stronger buy compared to General Electric (GE) based on the following analysis:
- Analyst Ratings and Price Targets: Both stocks have a "Strong Buy" consensus rating from analysts. However, LMT's average price target is $645.73, which is a 14.3% premium over its current price, indicating potential for significant appreciation. In contrast, GE's average price target is $214.33, which is a 16.4% premium over its current price. While both stocks have strong buy ratings, LMT's price target suggests a more substantial upside potential1.
- Financial Performance and Growth Metrics: LMT's net profit margin is 9.51%, compared to GE's 16.77%. This indicates that LMT is also profitable, but at a lower margin compared to GE. However, LMT's revenue grew by 1.34% year-over-year, which is a more modest growth rate compared to GE's 5.81%. LMT's lower net profit margin and revenue growth rate could be a concern for investors2.
- Technical Indicators: Both stocks are trading near their respective support and resistance levels. LMT is trading at $564.56, close to its support level of $551.61 and its resistance level of $645.73. GE is trading at $184.81, close to its support level of $178.29 and its resistance level of $214.33. The proximity to support levels suggests a potential for price upward movement if market sentiment turns favorable3.
- Moving Averages: The 5-day moving average for LMT is $551.61, the 10-day is $549.74, and the 50-day is $578. For GE, the 5-day moving average is $178.29, the 10-day is $175.9, and the 50-day is $180.78. The fact that all moving averages for both stocks are above the current trading prices suggests a potential for a price correction downward unless market sentiment or fundamentals change3.
- Valuation Metrics: LMT's P/E ratio is 20.05, P/S ratio is 1.88, and Price to Book Ratio is 18.59. GE's P/E ratio is 32.02, P/S ratio is 3.23, and Price to Book Ratio is 10.6. LMT's lower P/E and P/S ratios, along with a higher Price to Book Ratio, could indicate that it is undervalued compared to GE, which has higher ratios across these metrics4.
In conclusion, while both stocks have their strengths, LMT's higher analyst price target, strong buy rating, and potentially undervalued metrics compared to GE make it the more attractive buy at this time. However, investors should consider their risk tolerance and investment horizon, as GE's higher revenue growth rate and profitability could offer potential for long-term gains.
Source:
1.
GE, LMT Average Analyst Price Target, Consensus Rating
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