The Bethesda, MD-based security and aerospace company is unlikely to continue outperforming its peers, Barclays said.
"There's a lot to like about Lockheed Martin but every stock has a price where it just doesn't make sense to expect further outperformance," the firm added. "We think that price is here."
The firm maintained a "neutral" stance on the defense sector overall due to macroeconomic uncertainties, Barclays said.
Shares of Lockheed Martin were down 0.98% to $224.75 in pre-market trading on Monday.
Separately, 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 revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LMT's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
- Net operating cash flow has significantly increased by 53.23% to $1,517.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.68%.
- LOCKHEED MARTIN CORP reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LOCKHEED MARTIN CORP increased its bottom line by earning $11.21 versus $9.04 in the prior year. This year, the market expects an improvement in earnings ($11.35 versus $11.21).
- You can view the full analysis from the report here: LMT