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LMT trades against a final fair-value range of $506.70-$782.83, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
A sustained freeze or reduction in the U.S. defense budget combined with severe supply chain inflation, compressing operating margins below 9% and halting top-line growth.
Significant reduction in U.S. DoD spending prioritizing legacy system phase-outs over new procurement.
Chronic inflation and supply chain bottlenecks drive severe losses on legacy fixed-price contracts.
Unexpected rapid resolution of major global conflicts reducing international demand for tactical systems.
| Line item | 2022-12-31 | 2023-12-31 | 2024-12-31 | 2025-12-31 | Trend |
|---|---|---|---|---|---|
| Revenue | $65.98B | $67.57B+2.4% | $71.04B+5.1% | $75.05B+5.6% | +4.4% |
| Gross profit | $8.29B | $8.48B | $6.93B | $7.62B | -2.8% |
| Operating income | $8.35B | $8.51B | $7.01B | $7.73B | -2.5% |
| Net income | $5.73B | $6.92B+20.8% | $5.34B-22.8% | $5.02B-6.0% | -4.3% |
| EPS (diluted) | $21.66 | $27.55 | $22.31 | $21.49 | -0.3% |
| EBITDA | $8.71B | $10.44B | $8.82B | $8.73B | +0.1% |
| R&D | — | — | — | — | — |
| SG&A | — | — | — | — | — |
Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Deterioration versus the report thesis |
| Book-to-bill ratio dropping below 1.0x | Monitor | Deterioration versus the report thesis |
| Unplanned debt issuance to fund dividend payouts | Monitor | Deterioration versus the report thesis |
