Lockheed Martin valuation
LOCKHEED MARTIN CORP · NYSE: LMT · Industrials & materials · Updated Sep 25, 2026
Lockheed Martin's revenue grew 7.2% over the last twelve months and 4.4% a year over three years. Today's price of $523.85 implies 4.0% revenue growth in year 1, fading to 4.8% by year 10, at an operating margin of 11.6%.
Our base case continues the trend (5.8%, fading), moves the operating margin from 12.3% to 11.6% by year 5 and reinvests $0.18 of capital for each additional dollar of revenue. Discounted at 8.1%, that gives a base-case model value of $564.71 per share (bear $358.88, bull $846.21); the price is 7% below the base case.
Bear: growth 5 percentage points lower, target margin 20% lower. Bull: growth 5 points higher, target margin 20% higher. Cost of capital and capital intensity as in the base case.
Model value = output of a fixed, published method; not a price target, not a recommendation. How the model works
- How we got this number
- Multiples vs. peers
- What management says
- Competitors and their recent moves
- Analyst ratings
- Disclosure (MAR Art. 20)
How we got this number
1Historical base from the filings
All figures come from the XBRL data in the company's SEC filings (10-K, 10-Q), in US dollars. "TTM" = trailing twelve months. EBITA = operating income before amortisation of acquired intangibles and before expensed acquired R&D – both consequences of past acquisitions, which the model does not extrapolate.
| Data table | FY12/2020 | FY12/2021 | FY12/2022 | FY12/2023 | FY12/2024 | FY12/2025 | TTM06/2026 |
|---|---|---|---|---|---|---|---|
| Revenue | $65.4B | $67.0B | $66.0B | $67.6B | $71.0B | $75.0B | $77.0B |
| Revenue growth | – | 2.5% | −1.6% | 2.4% | 5.1% | 5.6% | 7.2% |
| Operating income (EBIT) | $8.64B | $9.12B | $8.35B | $8.51B | $7.01B | $7.73B | $9.15B |
| + Amortisation of acquired intangibles | $271M | $285M | $248M | $247M | $254M | $254M | $254M |
| EBITA | $8.91B | $9.41B | $8.60B | $8.75B | $7.27B | $7.99B | $9.41B |
| EBITA margin | 13.6% | 14.0% | 13.0% | 13.0% | 10.2% | 10.6% | 12.2% |
| Effective tax rate | 16.4% | 16.4% | 14.2% | 14.5% | 14.2% | 15.3% | – |
| Net income | $6.83B | $6.32B | $5.73B | $6.92B | $5.34B | $5.02B | $6.29B |
| Operating cash flow | $8.18B | $9.22B | $7.80B | $7.92B | $6.97B | $8.56B | $10.4B |
| Capital expenditure | $1.77B | $1.52B | $1.67B | $1.69B | $1.69B | $1.65B | $1.67B |
| Free cash flow (CFO − capex) | $6.42B | $7.70B | $6.13B | $6.23B | $5.29B | $6.91B | $8.73B |
| Operating invested capital | – | – | $10.4B | $11.2B | $12.4B | $12.4B | $13.6B |
| Sales / capital | – | – | 6.32 | 6.03 | 5.74 | 6.07 | 5.67 |
| ROIC | – | – | 70.6% | 66.8% | 50.4% | 54.8% | 59.5% |
Operating invested capital = equity + financial debt incl. leases − cash − goodwill − acquired intangibles − equity-method stakes: the capital that organic growth actually ties up. ROIC = EBITA × (1 − tax rate) / operating capital (TTM column: incl. lease interest, latest balance sheet). TTM revenue = FY ending 2025-12-31 ($75.0B) + year-to-date to 2026-06-28 ($38.1B) − prior-year period ($36.1B).
XBRL source of each line
- revenue: us-gaap:Revenues · TTM · period end 2026-06-28 · 0001628280-26-049411
- cost_of_revenue: us-gaap:CostOfRevenue · TTM · period end 2026-06-28 · 0001628280-26-049411
- gross_profit: us-gaap:GrossProfit · TTM · period end 2026-06-28 · 0001628280-26-049411
- ebit: us-gaap:OperatingIncomeLoss · TTM · period end 2026-06-28 · 0001628280-26-049411
- pretax: us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest · TTM · period end 2026-06-28 · 0001628280-26-049411
- tax: us-gaap:IncomeTaxExpenseBenefit · TTM · period end 2026-06-28 · 0001628280-26-049411
- net_income: us-gaap:NetIncomeLoss · TTM · period end 2026-06-28 · 0001628280-26-049411
- da: us-gaap:DepreciationAmortizationAndAccretionNet · TTM · period end 2026-06-28 · 0001628280-26-049411
- cfo: us-gaap:NetCashProvidedByUsedInOperatingActivities · TTM · period end 2026-06-28 · 0001628280-26-049411
- capex: us-gaap:PaymentsToAcquireProductiveAssets · TTM · period end 2026-06-28 · 0001628280-26-049411
- sbc: us-gaap:ShareBasedCompensation · TTM · period end 2026-06-28 · 0001628280-26-049411
- interest: us-gaap:InterestExpenseNonoperating · TTM · period end 2026-06-28 · 0001628280-26-049411
- amort: us-gaap:AmortizationOfIntangibleAssets · 10-K · period end 2025-12-31 · 0001628280-26-004195
2Cost of equity (CAPM)
- rf 4.79% – 10-year US Treasury yield on Sep 1, 2026, the date of the equity risk premium estimate (the two must match; today: 5.18% on Sep 24, 2026) (U.S. Treasury).
- ERP 4.14% – implied equity risk premium of the S&P 500 by Aswath Damodaran as of Sep 1, 2026 (NYU Stern). It is backed out of current index prices and expected cash flows, not historical averages.
- β 0.99 – bottom-up beta: the "Aerospace/Defense" industry (79 US firms, Damodaran, January 2026) has a cash-corrected unlevered beta of 0.87. Relevered with Lockheed Martin's leverage (debt incl. leases / market value = 17.8%): β = βU × (1 + (1 − t) × D/E) = 0.87 × (1 + 0.75 × 0.178) = 0.99
- In the mature state (from year 10) we set β = 1: kE = 4.79% + 4.14% = 8.93%, the market's expected return. In years 6–10 the cost of capital moves there linearly.
3Cost of debt
Interest coverage = EBIT / interest expense (TTM) = $9.15B / $1.11B = 8.2x. In Damodaran's table for large non-financial firms (January 2026) this maps to a synthetic rating of Aa2/AA with a 0.55% default spread.
Tax rate 25%: 21% federal plus about 4% state taxes (marginal rate).
4Weighted average cost of capital (WACC)
E = market value $121B (Sep 24, 2026); D = financial debt incl. lease liabilities $21.6B (book value as a proxy). This WACC applies to years 1–5; by year 10 it moves to 8.93%, the cost of capital of an average mature company (rf + ERP) – the rate at which Damodaran's implied premium discounts the market beyond year 5.
5Forecast and discounted cash flows
| Driver | Base case | How it is set |
|---|---|---|
| Revenue growth, year 1 | 5.8% | Average of the 3-year CAGR (4.4%) and trailing-twelve-month growth (7.2%); fades linearly to 4.8% by year 10. |
| Operating margin | 12.3% → 11.6% | Currently 12.3% (EBITA incl. lease interest); target in year 5: the company's own recent level (11.6%, average of three fiscal years and TTM), as it is above the industry (8.7%). |
| Tax rate | 14.7% → 25% | Effective rate of the last three years (years 1–5), then moving to the marginal rate. |
| Sales / capital | 5.48 | Reinvestment = revenue increase / 5.48. Company average 5.95, bounded to 0.5–2× the industry value (2.74). |
| Terminal ROIC | 16.0% | The lower of the company's return on capital (59.5%) and the industry's (16.0%), but at least the cost of capital (8.9%). Terminal reinvestment rate = g / ROIC = 29.9%. |
| Growth after year 10 | 4.79% | = risk-free rate (Damodaran's default; his implied premium is computed the same way). |
Industry values: Damodaran, "Aerospace/Defense", January 2026 (pre-tax lease-adjusted operating margin; sales / invested capital; after-tax return on capital).
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue growth | 5.8% | 5.7% | 5.6% | 5.5% | 5.3% | 5.2% | 5.1% | 5.0% | 4.9% | 4.8% |
| Revenue | $81.5B | $86.1B | $90.9B | $95.9B | $101B | $106B | $112B | $117B | $123B | $129B |
| Operating margin | 12.1% | 12.0% | 11.9% | 11.7% | 11.6% | 11.6% | 11.6% | 11.6% | 11.6% | 11.6% |
| Operating income | $9.90B | $10.3B | $10.8B | $11.2B | $11.7B | $12.3B | $12.9B | $13.6B | $14.3B | $14.9B |
| Tax rate | 14.7% | 14.7% | 14.7% | 14.7% | 14.7% | 16.7% | 18.8% | 20.9% | 22.9% | 25.0% |
| NOPAT | $8.45B | $8.82B | $9.20B | $9.59B | $9.98B | $10.3B | $10.5B | $10.8B | $11.0B | $11.2B |
| − Reinvestment | $814M | $844M | $875M | $905M | $935M | $964M | $993M | $1.02B | $1.05B | $1.08B |
| = FCFF | $7.63B | $7.98B | $8.33B | $8.69B | $9.05B | $9.29B | $9.51B | $9.73B | $9.94B | $10.1B |
| WACC | 8.1% | 8.1% | 8.1% | 8.1% | 8.1% | 8.3% | 8.5% | 8.6% | 8.8% | 8.9% |
| Discount factor | 0.925 | 0.855 | 0.791 | 0.731 | 0.676 | 0.624 | 0.576 | 0.530 | 0.487 | 0.447 |
| Present value | $7.06B | $6.82B | $6.59B | $6.35B | $6.12B | $5.80B | $5.48B | $5.16B | $4.84B | $4.53B |
| ROIC (model capital) | 60.1% | 59.3% | 58.6% | 57.8% | 57.1% | 55.6% | 54.2% | 52.8% | 51.3% | 49.9% |
The terminal value is 60% of enterprise value. Cash flows are discounted at year end with the cumulative cost of capital of each year.
6From enterprise value to equity value
| Enterprise value | $148B |
| + Cash and equivalents us-gaap:CashAndCashEquivalentsAtCarryingValue · 2026-06-28 | $3.79B |
| + Equity-method stakes (book value) us-gaap:EquityMethodInvestments · 2025-12-31 | $653M |
| − Long-term debt us-gaap:LongTermDebtNoncurrent · 2026-06-28 | −$20.5B |
| − Current debt us-gaap:LongTermDebtCurrent · 2026-06-28 | $0.00 |
| − Operating lease liabilities us-gaap:OperatingLeaseLiability · 2025-12-31 | −$1.07B |
| = Equity value (model) | $131B |
| ÷ Diluted shares WeightedAverageNumberOfDilutedSharesOutstanding · 2026-06-28 | 231.1 m |
| = Base-case model value per share | $564.71 |
| Reference price (IEX last trade) · 2026-09-24 19:59 UTC | $523.85 |
Lease liabilities count as debt; in turn, the operating margin excludes the interest component of lease payments. Share count: diluted weighted-average shares, latest quarter. Data provided for free by IEX. By accessing or using IEX Historical Data, you agree to the IEX Historical Data Terms of Use.
7Scenarios and reverse DCF: what the price implies
| Case | Growth Y1 | Target margin | Model value per share | Price vs. case |
|---|---|---|---|---|
| Bear | 0.8% | 9.3% | $358.88 | +46% |
| Base | 5.8% | 11.6% | $564.71 | −7% |
| Bull | 10.8% | 13.9% | $846.21 | −38% |
| Implied by the price | 4.0% | 10.8% | $523.85 | ±0% |
Reverse DCF: holding everything else fixed, we solve for the single assumption at which the model value equals the price – the starting growth rate (4.0%), the target margin (10.8%) or the cost of capital (8.4% instead of 8.1%).
8Sensitivity: WACC × terminal growth
Base-case model value per share for other costs of capital (rows: WACC of years 1–5; the shift applies to all years) and other growth after year 10 (columns). Outlined: base case. Reference price: $523.85.
| WACC \ g | 2.8% | 3.3% | 3.8% | 4.3% | 4.8% |
|---|---|---|---|---|---|
| 7.1% | $545.95 | $581.50 | $624.76 | $678.86 | $748.94 |
| 7.6% | $493.33 | $521.12 | $554.14 | $594.26 | $644.37 |
| 8.1% | $449.17 | $471.29 | $497.05 | $527.62 | $564.71 |
| 8.6% | $411.56 | $429.43 | $449.90 | $473.71 | $501.91 |
| 9.1% | $379.13 | $393.76 | $410.28 | $429.16 | $451.08 |
Multiples vs. peers
Peer group "Industrials & materials" within our coverage. Ratios use trailing-twelve-month figures and market values as of Sep 24, 2026. EV = market value + debt incl. leases + minorities − cash.
| Company | Market value | Impliedgrowth | Basegrowth | Price vs.base case | EV/EBITDA | P/E | P/S | EBIT-margin | Growthlast FY |
|---|---|---|---|---|---|---|---|---|---|
| GE Aerospace | $335B | 17.3% | 19.0% | −6% | 28.5x | 37.3x | 6.6x | 22.2% | 18.5% |
| RTX | $258B | 19.0% | 10.8% | +42% | 19.4x | 33.3x | 2.8x | 11.2% | 9.7% |
| Lockheed Martin | $121B | 4.0% | 5.8% | −7% | 12.7x | 19.3x | 1.6x | 11.9% | 5.6% |
| Union Pacific | $163B | 16.0% | 1.8% | +65% | 15.1x | 22.2x | 6.4x | 40.0% | 1.1% |
| Linde | $217B | 23.1% | 3.6% | +126% | 18.6x | 30.0x | 6.1x | 26.5% | 3.0% |
| Peer median | 18.2% | 7.2% | 19.0x | 31.6x | 6.3x | 24.3% | 6.4% |
Median excludes Lockheed Martin. "n/m": negative or not meaningful.
What management says
Short, attributed excerpts from the company's own latest earnings release (SEC Form 8-K, Exhibit 99.1). Quotes are reproduced verbatim; they are management's statements, not ours.
Lockheed Martin Reports Second Quarter 2026 Financial Results
Earnings release · Form 8-K · filed Jul 23, 2026 · Document at the SEC
No attributable management quote could be extracted automatically from the latest earnings release; see the linked documents.
Outlook excerpt: ““We delivered strong second‑quarter performance, with over $20 billion in sales – a year‑over‑year increase of 11% – free cash flow of $2.9 billion, and $65 billion of new orders, which takes our backlog to a record $230 billion. …”
- Annual report (10-K) · period 2025-12-31 · filed Jan 29, 2026 – includes management's discussion and analysis (MD&A)
- Latest quarterly report (10-Q) · period 2026-06-28 · filed Jul 23, 2026
- All filings by LOCKHEED MARTIN CORP (SEC EDGAR)
Competitors and their recent moves
Notable filings by peers in the last 120 days (SEC Form 8-K items such as acquisitions, material agreements, restructurings, leadership changes and results).
- Sep 22, 2026 · GE Aerospace
Board or executive changeOther material event · 8-K - Sep 15, 2026 · RTX
Board or executive changeRTX names Jill Albertelli as President, Pratt & Whitney · 8-K - Sep 8, 2026 · GE Aerospace
Regulation FD disclosureOther material eventGE Aerospace to acquire Consolidated Precision Products (CPP) September 8 , 2026 · 8-K - Jul 31, 2026 · Linde
Quarterly or annual resultsLinde Reports Second-Quarter 2026 Results · 8-K - Jul 23, 2026 · RTX
Quarterly or annual resultsRTX Reports Q2 2026 Results · 8-K - Jul 23, 2026 · Union Pacific
Quarterly or annual resultsUnion Pacific Reports Second Quarter 2026 Results · 8-K - Jul 16, 2026 · GE Aerospace
Quarterly or annual resultsRobust services growth drives strong 2Q, raising full-year guidance across the board · 8-K - Jun 11, 2026 · GE Aerospace
Board or executive change · 8-K
Analyst ratings
Consensus ratings and price targets from brokers are licensed data. We do not republish them. You can compare our model with the analyst consensus at these public sources:
External links; we are not responsible for their content.
Disclosure (MAR Art. 20)
- Producer
- NyxAI GmbH, Reiterkasernstraße 2a, 85049 Ingolstadt, Germany · responsible: Lars Heppert · Legal notice
- Model completed
- 2026-09-25 14:19 UTC (automated daily run)
- First published / last updated
- 2026-09-25 14:11 UTC / 2026-09-25 14:19 UTC
- Prices used
- Last regular-session trade on IEX on 2026-09-24 at 19:59:54 UTC: $523.85. This is not the official closing price of the primary exchange.
- Financial data
- SEC Form 10-Q, period 2026-06-28, filed 2026-07-23; balance sheet date 2026-06-28
- Methodology
- How the model works · steps 1–8 above
- Main assumptions
- rf 4.79% · ERP 4.14% · β 0.99 · WACC 8.14% → 8.93% · growth 5.8% → 4.79% · target margin 11.6% · sales/capital 5.48 · ROICterm 16.0% · scenarios: step 7, sensitivity: step 8
- Nature of this information
- Model-based estimate (base-case model value with a bear–bull range), computed automatically from public data with a fixed method. Not investment advice, not a recommendation to buy, sell or hold, not a price target, no investment horizon. The result depends heavily on the assumptions. Reported facts, market data, assumptions and model outputs are labelled above.
- Conflicts of interest
- Neither NyxAI GmbH (producer) nor its affiliated companies nor the responsible person hold positions in LOCKHEED MARTIN CORP.NyxAI GmbH receives no payment from the companies covered for these pages, and they had no influence on content or results. Disclosures (as of Sep 25, 2026).
Sources for this page
- Financial statements: SEC EDGAR, XBRL company facts (CIK 936468), 10-Q 2026-07-23
- Share price: IEX Historical Data (TOPS), 2026-09-24. Data provided for free by IEX. By accessing or using IEX Historical Data, you agree to the IEX Historical Data Terms of Use. IEX Historical Data Terms of Use
- Risk-free rate: U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates (10 Yr), 2026-09-01
- Equity risk premium: Aswath Damodaran, implied equity risk premium for the S&P 500 (trailing 12-month cash yield, adjusted payout), 2026-09-01
- Default spreads: Aswath Damodaran, Ratings, Interest Coverage Ratios and Default Spread (January 2026)
- Industry betas: Aswath Damodaran, Betas by Sector (US) (January 2026)
- Industry values: Aswath Damodaran, Operating margins, Sales/Invested capital, Return on capital (January 2026)