Why Lockheed Martin (LMT) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Lockheed Martin Corp. (LMT) are higher by 3.0% to $161.39.

Australian Prime Minister Tony Abbott today said the country would order 58 additional F-35 fighter jets worth $11.61 billion.

That follows the defense contractor's first quarter results, reported yesterday, when they reported that profit increased 23%.

Net income from continuing operations was up $933 million, or $2.87 a share, from $761 million, or $2.33 a share, a year ago, and ahead of the $2.53-a-share estimate of 21 analysts surveyed by Bloomberg.

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TheStreet Ratings team rates LOCKHEED MARTIN CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate LOCKHEED MARTIN CORP (LMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, LMT's share price has jumped by 65.63%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LMT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 171.33% to $938.00 million when compared to the same quarter last year. In addition, LOCKHEED MARTIN CORP has also vastly surpassed the industry average cash flow growth rate of 3.90%.
  • LOCKHEED MARTIN CORP's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LOCKHEED MARTIN CORP increased its bottom line by earning $9.04 versus $8.34 in the prior year. This year, the market expects an improvement in earnings ($10.60 versus $9.04).
  • LMT, with its decline in revenue, underperformed when compared the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Aerospace & Defense industry and the overall market, LOCKHEED MARTIN CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: LMT Ratings Report
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