Lockheed Martin and RTX Stock: Rising Pillars of Modern Defense

The conflict in Iran has led to high munitions usage by the U.S., more so than initially expected.

So much so that defense contractors are being summoned to increase the production of both missiles and defense systems, specifically Lockheed Martin LMT and RTX Corporation RTX.

With the White House hosting executives from both companies last Friday, Lockheed and RTX have continued to incur lucrative contracts. Leading to the meeting, has been the Pentagon’s concerns that munitions stockpiles are getting low, as the lead time to produce the advanced weaponry that is needed can often take years.

Reassuringly, to the interest of the U.S. government and investors amid such high demand, Lockheed and RTX are making strategic moves to speed up their production capabilities.

To that point, there has been a somewhat dire need for the THAAD anti-ballistic defense system, which is produced by Lockheed, and the Tomahawk, a long-range cruise missile that is made by RTX.

Both companies continue to receive new contracts for the F-35 fighter jet as well, which Lockheed builds, while RTX provides the key components.

Timeline: LMT & RTX’s Strong Price Performance

The first U.S. strike on Iran occurred in June of 2025, when the Air Force and Navy attacked three Iranian nuclear facilities under the code name Operation Midnight Hammer. Leading up to what has now turned into an ongoing war-themed Operation Epic Fury, Lockheed and RTX stock have risen 40% and 57% in the last year, respectively.

Continuing to outperform the broader market and the Zacks Aerospace-Defense Industry, RTX has now soared +150% in the last five years, with LMT spiking more than 70%. These reliable returns come as Lockheed and RTX weapons have been used extensively in the Ukraine-Russia war, which went into full-scale in February of 2022.

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Lockheed & RTX's Steady Expansion

Lockheed’s annual sales are expected to increase 5% this year and are projected to rise another 4% in fiscal 2027 to $82.34 billion.

Taking advantage of its steady top line expansion, Lockheed’s annual earnings are currently slated to spike 29% in FY26 to $29.87 per share from EPS of $23.12 last year. Better still, FY27 EPS is projected to increase another 8% to a whopping $32.26.

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Pivoting to RTX, FY26 sales are expected to be up 5%, with its top line projected to stretch another 7% next year to over $100 billion.

On the bottom line, FY26 EPS is slated to grow 8%, with RTX’s annual earnings forecasted to jump another 10% in FY27 to $7.50 per share.

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Increased Production: Backlog & CapEx

Equipping the F-35 fighter jet with the latest cutting-edge tech, including AI-assisted targeting suggestions, Lockheed has secured two new F-35-related contracts. Being part of the F-35 production ecosystem, RTX received modification contracts to bolster the engines, along with new modernization deals to upgrade its Tomahawk missiles.

Notably, Lockheed has also signed an agreement with the Pentagon to quadruple production of its THAAD missile interceptors, after recently signing a deal to increase the output of its Patriot air-defense system (PAC-3), which has been heavily used by Ukraine.

It's noteworthy that RTX is a direct beneficiary of increased THAAD production as well, as it supplies key radar components that play a crucial role in the defense system’s overall performance. THAAD uses these radars and interceptor missiles to shoot down short, medium, and long-range missiles. As of now, the U.S. has nine THAAD systems positioned around the world, with the missiles used in the system expected to go from a production rate of 96 per year to an annual rate of 400.

To do so, Lockheed plans to open a new “munitions acceleration center” in Camden, Arkansas, as part of a multi-billion-dollar investment to expand PAC-3 production as well.

Lockheed has not provided capital expenditures (CapEx) guidance for FY26, but a relatively sharp increase should be expected. That said, Lockheed’s trailing 12-month (TTM) CapEx is down 2% year over year at $1.64 billion. Going into 2026, Lockheed’s backlog had increased 8% YoY to a record $194 billion, justifying the increase in production and CapEx.

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As for RTX, its backlog had increased 23% YoY to a peak of $268 billion, reflecting strong demand across both its commercial and defense segments.

On a TTM basis, RTX’s CapEx is slightly up at just over $2.62 billion. RTX does expect its investments to remain elevated relative to the past to support missile production, radar systems, and aerospace manufacturing capacity.

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Bottom Line

Lockheed Martin and RTX Corporation are seeing unusually strong, record-level demand right now, driven by global conflicts, massive U.S. defense spending, and historic backlogs.

This makes it a compelling moment for long-term investors, as these top aerospace and defense stocks are sitting on multi-year revenue visibility, expanding production capacity, and benefiting from geopolitical tensions that are unlikely to ease soon.

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