LOCKHEED - Stocks

LOCKHEED
Min Spread *
80
Target Spread *
80
Leverage/Margin
1:5
Commission
0
Swap point Long/Short
-0.90 / -0.90
Nominal Value of one lot
100
Trading hours
16:30 - 23:00

Instrument description

Lockheed Martin is one of the largest and most prominent company in aerospace, military support, and technology sector. Lockheed is the world’s largest defense contractor and excels in aerospace, security, and advanced technologies.

Lockheed Martin is a merger of two companies, Lockheed Corporation and Martin Marietta, which took place in 1995. The company is headquartered in Bethesda, Maryland, and has almost 110,000 employees. A major portion of the company’s revenue comes from military sales, and Lockheed Martin is one of the leading government contractors and receives nearly 10% of funds from the US government.

Lockheed Martin is also a contractor for the US National Aeronautics and Space Administration (NASA) and the US Department of Energy. Lockheed Martin is known for its research and development, and the company has won the prestigious Collier Trophy six times. The most recent Collier Trophy was given in 2018 for developing the Automatic Ground Collision Avoidance System (Auto-GCAS).

History of Lockheed Martin

The merger between Lockheed Corporation and Martin Marietta was announced on August 30, 1994, for a deal valued at $10 billion, and the merger was finalized on March 15, 1995. The merger was significant in US history as it brought together two industrial giants and led to the consolidation of aeronautics, space and strategic systems, electronics, and information technology.

Both companies had a diversified portfolio of technology products and services. Both the companies also received funds and subsidiaries worth billions of dollars to complete the financial requirements of the merger.

The emphasis of Lockheed was in the design and development of military aircraft that included the iconic F-series, P-3 Orion patrol aircraft, C-130 Hercules, the DSCS-3 satellite, and other reconnaissance aircraft. Martin Marietta was mostly known for design development of Space vehicles and systems that included Space Shuttle External Tank, Titan rockets, Viking 1 and Viking 2 landers, and Sandia National Laboratories.

Lockheed Martin acquired the defense and electronics business of Loral Corporation in April 1996 for $9.1 billion. Apart from the main focus on military and security systems, Lockheed Martin also provided technical support to Sega, which was a popular gaming console in the world in the 1990s. Lockheed Martin developed texture mapping in Sega Model-2 and provided complete graphics for the Sega Model-3.

In July 2000, Lockheed Martin sold its Aerospace Electronic Systems to British aerospace and space company ‘BAE Systems’ for $1.67 billion. In August 2018, Lockheed Martin acquired Nantero Inc., which developed techniques to combine carbon nanotubes in electronic devices. Lockheed Martin acquired Unitech in 2009.

In May 2011, Lockheed Martin acquired the first Quantum Computing System from D-Wave Systems. In January 2013, Lockheed Martin Canada announced a deal with Aveos Fleet Performance in Montreal to acquire its engine repair, overhaul, and maintenance unit. In July 2013, Lockheed Martin teamed with famous Bell Helicopter to put forward V-280 Valor tiltrotor for the innovative Future Vertical Lift program. In September 2013, Lockheed Martin acquired Amor Group, which was a tech firm based in Scotland.

To expand business in commercial airport information technology, Lockheed Martin acquired Beontra AG in March 2014. Lockheed Martin planned to get Sikorsky airplane from United Technologies Corporation for a deal worth $7.1 billion. In November 2018, Lockheed Martin was given a contract valued at $2.6 billion by NASA on ‘Commercial Lunar Payload Services.’ Lockheed Martin and NASA again came in agreement in September 2019 and signed a contract worth $4.6 billion to design and build six or more Orion capsules, which will help to take astronauts to the Moon.

Current Business and Investment of Lockheed Martin

Lockheed Martin is a major company in the global aerospace and security sector. The company also works and invests in renewable energy systems, healthcare systems, and intelligent energy distribution systems. Lockheed Martin is an established and prominent company that has the resources and skill for researching, designing, developing, producing, and integrating technology products, services, and systems. The company operates in the following segments that are Aeronautics, Rotary and Mission System (RMS), Missiles and Fire Control, and Space.

  • Aeronautics

This division is involved in researching, designing, developing, integrating, sustaining, supporting, and upgrading mobility and combat aircraft, and crewless airplanes.

  • Rotary and Mission System

This unit manages various functions related to design, development, manufacturing, and support of military and commercial helicopters, combat ships and submarines, sensors, and systems for rotary and fixed-wing aircraft along with radar systems. This unit also offers training and simulation services.

  • Missiles and Fire Control

This segment provides missile defense systems along with logistics, engineering support, fire control systems, manned and unmanned vehicles, integration services, and energy management systems.

  • Space

This division is responsible for research and development in space technology. The satellites, along with space transportation systems, are designed, developed, and engineered.

The merger of Lockheed Martin has helped to achieve significant milestones in defense and aerospace fields such as the Hubble Space Telescope, the Titan and Atlas space launch vehicle, the F-22 Stealth aircraft, and the space station ‘Freedom.’

Risk and Potential in Lockheed Martin Environment

Lockheed Martin is a renowned name in the field of aerospace, security, military, and advanced technological systems. The total revenue of Lockheed Martin in 2019 was $59.8 billion, while the net income was $6.23 billion, and total assets were $47.5 billion in 2019. The SWOT analysis is a strategic management tool that allows a big company such as Lockheed Martin to examine the performance and coordination among its various business functions. The SWOT analysis of Lockheed Martin is given by

  • Strengths

Lockheed Martin is a global company when it comes to Aerospace and Defense, Security, Space and Emerging technologies, and Advanced Information Technology systems. The company is financially stable, and almost 85% of its revenue comes from US government contracts. Lockheed Martin has a wide range of products, which include jet aircraft, radar systems, Space vehicles and systems, and Atlas launch vehicles. The company has a very qualified and skilled workforce that has helped the company earn several awards and recognition. Lockheed Martin has a history of delivering innovative products and spending heavily on Research and Development (R&D).

  • Weaknesses

Lockheed Martin depends heavily on the US government for revenue through its contracts and projects. The company needs to invest more on the integration of new technologies and do effective financial planning.

  • Opportunities

Lockheed Martin has a tremendous opportunity to grow and expand as there are many countries in the world who are wanting to improve their defense and security systems. AS the technology will get more advance, the countries will demand modern and efficient defense equipment. Lockheed Martin can also integrate Artificial Intelligence in its products and systems.

  • Threats

Lockheed Martin faces challenges in the form of changing technology and global trade barriers. The defense budget cuts also affect the productivity and financial health of the company. Lockheed Martin also faces competition from Boeing, General Dynamics, Northrup Grumman, and Raytheon.

Stock Analysis of Lockheed Martin

Lockheed Martin is listed and actively trades on the New York Stock Exchange (NYSE) with the ticker symbols ‘LMT.’ The company is listed under the ‘Electronic Technology’ Sector, and the industry is ‘Aerospace and Defense.’ Lockheed Martin is also a member of other indices such as the S&P-100 Index, and S&P-500 Index.

The all-time high share price of Lockheed Martin was $439.85 on February 11, 2020, and the average price in the last 52 weeks is $383.63.

The stock value was performing quite well due to the sale of its iconic F-35 jet, but the Coronavirus pandemic has impacted not only the businesses but the overall economy of the US. Lockheed Martin posted strong financial results in the second quarter, where revenue rose to $16.22 billion, with a 12.4% increase, while the expected revenue was $15.24 billion. The earnings also rose to $6.13 per share, with a 22.6% increase while expected was $5.17 per share.

The profitable financial performance in the second quarter was made possible due to improvement in supply chain management. Lockheed Martin recorded a 9% increase in revenue and a 24% increase in earnings in the last three years. The Missile and Fire Control division is the most profitable unit of the company and recorded a 16% gain while the Aeronautics unit saw a 17% gain. The Covid-19 outbreak has disrupted supply chains, and fluctuating oil prices can impact the financial performance of the company in the third quarter. The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.

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