LMT · Lockheed Martin

The thesis

Lockheed Martin's record $292.0 billion backlog and raised 2026 guidance make the shares modestly more likely than not to beat the S&P 500 over the next three months. The 11 December 2026 federal funding deadline settles the near-term question. An orderly extension keeps contract awards flowing. A shutdown, or a final bill without F-35 multiyear authority, would weaken the case.

The shares have recovered from the post-midterm selloff. They closed at $604.09 on 12 November 2026, up from $567.08 on 6 November 2026 and above both the 50-day and 200-day moving averages. No new results, guidance or budget decision came between those dates. The rebound followed company news of contract and production progress. The rating is Medium because the business facts behind it still hold, and the budget question is still open.

Over three months the shares are 0.1% lower, despite the 22 October 2026 guidance raise. The price already reflects a fiscal 2027 defense budget delayed into 2027 and the loss of the extra party-line funding. It does not reflect a shutdown after 11 December 2026 or a charge on the F-35 Lot 20 contract.

Washington analysts expect the budget to come late. On 5 November 2026 Breaking Defense reported that TD Cowen's Roman Schweizer expects the defense authorization and appropriations bills to be delayed until early 2027. Capital Alpha Partners' Byron Callan put the odds of a shutdown after the deadline at 50%. On 6 November 2026 Forecast International wrote that the $350 billion reconciliation package in the White House's $1.5 trillion fiscal 2027 request is effectively dead in the new Congress. It also expects another short-term funding bill that runs into 2027.

Bullish and bearish views on Lockheed Martin Corporation

The bull case on Lockheed Martin Corporation (LMT), in brief: second straight guidance raise. The bear case: the budget decision moves to 2027.

Bull case

• Second straight guidance raise. On 22 October 2026 the company raised 2026 guidance to sales of $80.0–82.0 billion, diluted earnings per share (EPS) of $30.35–30.75 and free cash flow of $7.8–8.0 billion (third-quarter release). Third-quarter EPS was $7.97, against a $7.52 consensus, and revenue rose 11.3% to $20.71 billion (MarketBeat, 10 November 2026).
• Record $292 billion backlog. Backlog reached $292.0 billion at the end of the third quarter, including $52.5 billion tied to the multiyear PAC-3 MSE interceptor award (company release, 22 October 2026).
• Missile output is rising. On 10 November 2026 the company reported delivering its 100,000th GMLRS rocket, at a production rate of nearly 14,000 a year. On 30 October 2026 the State Department approved a possible $2.1 billion sale of 500 PAC-3 MSE missiles to Ukraine.
• Foreign helicopter demand. On 6 November 2026 the State Department approved a possible $1.08 billion sale of UH-60M Black Hawk helicopters to Mexico. The same day, South Korea selected Sikorsky's S-92A+ for its Presidential Helicopter II program (Benzinga).
• Analysts held their targets through the vote. Guggenheim began coverage with a Buy rating and a $735 target on 4 November 2026. Wells Fargo raised its target to $700 from $600 at Equal-Weight on 2 November 2026. MarketBeat's consensus target was $647.00 on 10 November 2026, from 1 Strong Buy, 11 Buy, 10 Hold and 1 Sell ratings.

Bear case

• The budget decision moves to 2027. Breaking Defense reported on 5 November 2026 that analysts expect the defense bills to slip into early 2027. By then Democrats control both chambers of Congress.
• Shutdown risk at the deadline. Capital Alpha Partners' Callan put the chance of a shutdown after 11 December 2026 at 50% (Breaking Defense, 5 November 2026). Forecast International noted on 6 November 2026 that a long-term funding extension is also possible. That would delay new programme starts and production increases.
• Party-line funding is fading. Forecast International estimates that losing the reconciliation package would remove about $113 billion of defense industrial-base funding (6 November 2026). Several F-35 airframes were placed in that package and would need regular budget funding instead. Incoming House Armed Services chair Adam Smith wants to keep defense spending under $1 trillion.
• F-35 Lot 20 is underfunded. The third-quarter Form 10-Q says costs on the Lot 20 advance acquisition contract began exceeding authorization and funding in the quarter. The company warned of negative effects without further government action.
• Cash calls are rising. The company bought Ultra Maritime for $3.45 billion in US dollars (CBC). The 10-Q said the purchase would be funded with cash on hand.

Price setup

Adjusted daily closes show the shares at $567.08 on 6 November 2026, $588.19 on 9 November 2026, $603.12 on 10 November 2026, $610.05 on 11 November 2026 and $604.09 on 12 November 2026. MarketBeat reported that the 2.5% gain on 10 November 2026 came on volume about 38% below average.

As of the 12 November 2026 close, the 50-day moving average is $552.28 and the 200-day is $564.55. The shares sit above both again. The $551.51 close on 21 October 2026, the day before the third-quarter report, is the level that measures the post-earnings gain.

The last close is 12.7% below the 52-week intraday high of $692.00 set on 2 March 2026. The 52-week closing low is $439.19, from 1 December 2025. The 3-month change is −0.1%.

Catalysts ahead

• 1 December 2026: Ex-dividend and record date for the raised $3.60 quarterly dividend, payable 31 December 2026. It is the only dated company event before the funding deadline, and it sets who receives the raised dividend.
• 11 December 2026: Federal temporary funding expires. A short extension pushes F-35 multiyear authority and Lot 20 funding into 2027; a lapse would bring the shutdown that Capital Alpha Partners puts at 50% odds.
• 3 January 2027: New Congress convenes with Democratic majorities in both chambers. Any deferred defense authorization or appropriation, including F-35 multiyear authority and F-35s moved out of the reconciliation request, would be finished under Democratic leaders.
• ~27 January 2027 (est.): Fourth-quarter 2026 results and 2027 guidance. Shows whether the $292.0 billion backlog turns into a 2027 sales outlook above the 2026 range despite budget doubts, and whether Lot 20 produces a charge.

What would change the view

A daily close below $545, which would erase the full 22 October 2026 post-earnings gain and sit under the $551.51 pre-report close. A 2026 guidance cut below $80.0 billion in sales or $30.35 in EPS, a charge on the underfunded F-35 Lot 20 contract, or a final defense bill omitting F-35 multiyear authority would also break the case.

The risks this note tracks, each with what would confirm it:

• Congress fails to extend funding on 11 December 2026 and a shutdown delays new defense contract actions. Confirmed by: a funding lapse after 11 December 2026 lasting into late December, with Pentagon contract announcements slowing.
• A long-term continuing resolution freezes fiscal 2027 defense spending at fiscal 2026 levels and blocks new starts and production increases. Confirmed by: Congress passing a full-year funding extension instead of a fiscal 2027 defense appropriation.
• Democratic control of Congress leaves the fiscal 2027 and 2028 defense budgets well short of the White House request. Confirmed by: a fiscal 2027 appropriation near or below $1.15 trillion with no party-line funding, or analyst target cuts citing lower budget assumptions.
• Congress does not grant F-35 multiyear authority, or does not fund the F-35s placed in the reconciliation request. Confirmed by: a final fiscal 2027 defense authorization bill or appropriation that omits the authority or cuts F-35 quantities.
• The F-35 Lot 20 funding gap turns into a charge or cash drain. Confirmed by: a programme charge or cash-flow guidance cut tied to Lot 20 in the fourth-quarter report before Congress acts on funding.
• Company-funded development, F-35 initiatives and the Ultra Maritime purchase weigh on cash. Confirmed by: 2027 free cash flow guidance below the raised 2026 range of $7.8–8.0 billion in the fourth-quarter report.
• A US–Iran deal removes the geopolitical premium in defense shares. Confirmed by: a signed agreement to reopen the Strait of Hormuz, with defense shares falling on the news as they did on 22 September 2026.

What it trades with

The shares trade with the other defense primes on budget news. Benzinga reported that Lockheed Martin, Northrop Grumman, RTX and General Dynamics all fell on 4 November 2026 as the Democratic sweep raised doubts about defense spending. A single funding outcome on 11 December 2026 is likely to move the group together. On days when defense names fall on budget news, the shares can lag the S&P 500.

Geopolitical news also moves the group. The shares fell on 22 September 2026 on news of progress toward a US–Iran deal. Motley Fool reported on 10 November 2026 that the shares rose 25.1% in October on the third-quarter results and new multiyear Pentagon agreements. That move was driven by company news, separate from the wider market.