RTX vs Lockheed Martin: Cramer Weighs in on Defense Stocks

Jim Cramer recommends RTX over Lockheed Martin Corporation (LMT) due to its strong defense stock performance and potential for higher returns. Lockheed Martin has faced a decline in revenue and profit, missing analyst estimates. Cramer previously advised staying long on Lockheed Martin but now suggests RTX as a better investment option.

In a recent segment, Jim Cramer highlighted the strong performance of RTX Corporation (NYSE:RTX) over Lockheed Martin Corporation (NYSE:LMT), recommending the former as a better investment option. This shift in Cramer's stance is notable given his previous advice to stay long on Lockheed Martin.

RTX Corporation's Strong Performance

RTX Corporation has seen its shares gain 34.7% year-to-date, benefiting from robust earnings performance, bullish analyst sentiment, and geopolitical tensions in the Middle East and Europe [2]. Cramer praised RTX for its potential to deliver higher returns compared to Lockheed Martin and Northrop Grumman. He noted that the thawing of trade tensions between the EU and the US could drive strong demand for RTX's products.

Lockheed Martin's Mixed Q2 Results

Lockheed Martin Corp. (NYSE:LMT) reported mixed second-quarter 2025 results, with net sales of $18.16 billion marginally missing analyst estimates. While adjusted earnings per share of $7.29 topped consensus forecasts, GAAP EPS plunged to $1.46 due to pre-tax charges tied to legacy program issues [3]. The company's operating margin dropped to 4.1% from 11.9% a year earlier, reflecting margin compression across its segments.

Cramer's Shift in Advice

Cramer previously advised staying long on Lockheed Martin but has now shifted his recommendation to RTX. This change is likely influenced by RTX's strong performance and potential for higher returns. While Lockheed Martin's platforms, such as the F-35, F-22, PAC-3, THAAD, and Aegis, have proven effective in combat and deterrence roles, the company has faced challenges with legacy programs and margin compression.

Conclusion

Investors should closely monitor both companies' performance as the defense sector continues to evolve. While Lockheed Martin faces challenges with legacy programs, RTX's strong earnings and potential for higher returns make it an attractive option for investors. As always, it is crucial to conduct thorough research and consider individual investment goals and risk tolerance before making any investment decisions.

References

[1] https://finance.yahoo.com/news/general-dynamics-corporation-gd-posted-231831185.html
[2] https://finance.yahoo.com/news/rtx-corporation-rtx-over-lockheed-234340447.html
[3] https://www.inkl.com/news/missile-wins-can-t-offset-margin-collapse-lockheed-martin-tumbles-after-q2-report