Lockheed Martin (LMT) Stock Lower, Downgraded at RBC Capital

NEW YORK (TheStreet) -- Shares of Lockheed Martin (LMT) - Get Report are declining 0.89% to $239.43 in pre-market trading on Thursday as the stock was downgraded to "sector perform" from "outperform" at RBC Capital Markets this morning.

The firm has a $244 price target on the Bethesda, MD-based security and aerospace company.

The lower rating is prompted by the stock's strong performance and the consequent expansion in its valuation multiple, RBC Capital said.

"This puts Lockheed at the highest valuation that we have seen in 10 years - and the only time that the valuation was higher was when the Department of Defense budget was growing at a double digit rate in 2002-2003, and the U.S. military was heavily engaged in Afghanistan," the firm wrote in a note.

In the more immediate term, Lockheed potentially has less flexibility on cash deployment, RBC Capital added.

But, "it could be argued that Lockheed's elevated valuation reflects the improved outlook for the F-35, where we have started to (finally) see a material pick up in deliveries," the firm said.

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Separately, TheStreet Ratings Team has a "Buy" rating with a score of A+ on the stock.

The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and reasonable valuation levels.

The team feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that were evaluated.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: LMT