Lockheed Martin: A Strategic Entry Point Amid Near-Term Headwinds?

Lockheed Martin (NYSE:LMT) has long been a bellwether of U.S. defense might, but its stock has lagged the broader aerospace and defense sector in recent months. With earnings per share (EPS) growth projected to decline in Q2 2025 and valuation discounts widening, investors face a classic dilemma: Is this a fleeting stumble or a signal of deeper vulnerabilities? For those willing to look past near-term noise, the answer may lie in the company's unmatched position in critical programs, a bulging backlog, and a valuation that now offers a compelling margin of safety.

The Near-Term Storm Clouds: Earnings Pressures and a "Hold" Rating

Lockheed's upcoming July 29 earnings report will test investor patience. Analysts project a Q2 2025 EPS of $6.59, a 7% drop from $7.11 in the same period last year (). Revenue growth is also expected to slow to 2.6%, with the Space segment grappling with program lifecycle declines and the lingering impact of tariffs. These headwinds have pushed the Zacks Equity Research rating to “Hold,” reflecting skepticism about short-term execution amid macroeconomic and geopolitical uncertainties.

The stock's recent underperformance is undeniable. At $480, LMT trades 9% below its 52-week high and lags the S&P 500 Defense Sector ETF (ITP) by 5 percentage points year-to-date (