Lockheed Martin is currently experiencing a favorable market environment, characterized by a dual focus on delivering advanced systems and significantly scaling production for key missile defense programs. This combination of operational progress and a record-breaking order backlog is shaping investor sentiment, even as some institutional shareholders adjust their positions.
Operational Advances: Deliveries and a Manufacturing Ramp-Up
The defense contractor recently announced a milestone in its radar program, delivering the first Sentinel A4 unit from its LRIP-2 batch to the U.S. Army. This next-generation system is designed to detect and track diverse aerial threats, including cruise missiles and drones, and will eventually replace older Sentinel A3 models.
Perhaps more significant for the company’s medium-term outlook is a major expansion in manufacturing capacity. Lockheed has entered into a framework agreement with the U.S. Department of Defense to dramatically increase output for two critical missile defense systems:
- THAAD interceptors: Production is slated to quadruple.
- PAC-3 missiles: Output is expected to see a significant rise.
This production surge aligns with the company’s recently reported record order backlog of approximately $194 billion. The underlying message is clear: demand for modern air and missile defense is robust enough to necessitate not just orders, but a substantial scaling of manufacturing capabilities.
Financial Performance and Market Outlook
For the fourth quarter of 2025, Lockheed Martin posted revenue of $20.3 billion. Its earnings per share came in at $5.80, which, according to reports, partially missed market expectations. Following these results, several analysts revised their price targets upward. Truist raised its target to $695, while RBC Capital increased its target to $650.
Should investors sell immediately? Or is it worth buying Lockheed?
Looking ahead to 2026, the company has provided revenue guidance in the range of $77.5 to $80.0 billion. This forecast reinforces the expectation that its substantial backlog will continue to translate into tangible growth.
On the trading floor, the stock remains near peak levels. Shares are currently priced at $636.00, after hitting a new 52-week high of $640.40 on Monday.
Institutional Selling: A Strategic Shift or Portfolio Management?
Recent 13F regulatory filings reveal that not all major investors are maintaining their stakes. Bridges Investment Management notably slashed its position in the third quarter of 2025, divesting 30,322 shares. This represents a reduction of roughly 81.1%, leaving the asset manager with a holding of 7,044 shares valued at approximately $3.5 million at the period’s end.
Such substantial moves by institutional holders can stem from various factors, including portfolio rebalancing or risk management strategies. This particular activity stands in contrast to a period where Lockheed is otherwise delivering positive operational news.
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