Lockheed Martin Corporation

Lockheed Martin Corporation is an American aerospace and defense prime contractor that designs, manufactures, and sustains advanced military platforms and systems — including the F-35 Lightning II fighter jet, PAC-3 missile defense interceptors, Sikorsky helicopters, and space-based strategic systems — generating $75.0 billion in revenue in fiscal 2025. With approximately 123,000 employees, a $230.4 billion record backlog, and the U.S. Government as its principal customer at 72% of sales, Lockheed Martin is the largest pure-play defense contractor in the world and a direct expression of American military procurement priorities.

This is a story about an industrial franchise at an inflection point. After three years of absorbing roughly $3.0 billion in reach-forward losses on fixed-price development programs — classified aircraft at Aeronautics, a classified munitions program at Missiles and Fire Control, the Canadian Maritime Helicopter Program at Rotary and Mission Systems — the company entered 2026 with those charges largely behind it and a demand environment unlike anything the defense sector has seen in a generation. The question is not whether the backlog will convert to revenue; at a book-to-bill of 3.2 in the most recent quarter, demand is unambiguous. The question is whether Lockheed Martin can convert that volume into durable margin expansion, and whether the framework agreements that are reshaping how the Pentagon buys munitions represent a one-time windfall or a permanent improvement in the defense industrial business model.

The file turns on a single judgment: with the stock at $568.59, the market is pricing Lockheed Martin at roughly 13.7 times trailing EBITDA and 20.9 times trailing earnings — multiples that sit near the middle of the company's five-year range. To earn a premium from here, the market needs to believe that the current up-cycle produces structurally higher returns on invested capital, not just a temporary volume surge. We think the framework agreements make that argument more credible than at any point in the past decade, but the burden of proof still lies with execution.