Lockheed Martin's Price Target Lowered to $554 by Truist Analyst Michael Ciarmoli

Truist analyst Michael Ciarmoli lowered Lockheed Martin's price target to $554 from $579, maintaining a Buy rating. He expects tariff headwinds to be manageable in both commercial aerospace and defense, with SMID cap defense and space stocks trading at a 122% valuation premium. The analyst cites a favorable global defense spending backdrop and sustained strength in commercial aerospace aftermarket.

Truist analyst Michael Ciarmoli has lowered Lockheed Martin's (NYSE: LMT) price target to $554 from $579, while maintaining a Buy rating. The decision comes amidst ongoing uncertainties surrounding U.S. tariffs and their potential impact on the aerospace and defense sectors. Ciarmoli expects tariff headwinds to be manageable in both commercial aerospace and defense, citing a favorable global defense spending backdrop and sustained strength in the commercial aerospace aftermarket [3].

Lockheed Martin's latest contract modification, valued at $197.48 million, underscores the company's continued involvement in U.S. Navy engineering design, development, and production, particularly for sound navigation and ranging systems. This contract, awarded by the Naval Sea Systems Command, is expected to be completed by September 2026 [1].

Meanwhile, the broader aerospace and defense sector is navigating a complex geopolitical landscape. Dassault Aviation, another key player, is well-positioned to benefit from the recent surge in European defense spending. The company's robust order book and strategic partnerships are key drivers for its anticipated growth [4].

While tariff uncertainties have led to fluctuations in the stock prices of auto and IT companies, the defense sector appears to be relatively insulated. The analyst notes that SMID cap defense and space stocks are trading at a 122% valuation premium to large cap peers, indicating a strong market sentiment towards these stocks [3].

Investors should closely monitor the U.S.-India trade deal negotiations, as any resolution could have significant implications for companies operating in both sectors. The 90-day pause to U.S. President Donald Trump's higher tariffs is set to expire on July 9, with elevated tariff rates likely to take effect from August 1 [2].

In summary, despite the recent price target adjustment, Lockheed Martin's strong position in the defense sector and favorable global spending trends suggest a promising outlook. Investors should remain vigilant regarding tariff developments and their potential impact on the company's performance.

References:
[1] https://seekingalpha.com/news/4466654-lockheed-martin-awarded-19748m-us-navy-contract-modification
[2] https://www.tradingview.com/news/moneycontrol:39051c392094b:0-auto-it-stocks-in-red-amid-tariff-uncertainty-maruti-suzuki-tech-mahindra-shares-down-up-to-2/
[3] https://www.tipranks.com/news/the-fly/l3harris-technologies-price-target-raised-to-279-from-260-at-truist-thefly
[4] https://www.marketscreener.com/quote/stock/DASSAULT-AVIATION-5215/news/Dassault-Aviation-Poised-for-Growth-Amid-European-Defense-Surge-50466606/