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. Fair value range: low $507, high $783, with mid-point at $644.
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§1 Yönetici özeti
Composite fair value $644 with high case $783.
Implied upside of 27.2% to fair value.
Moat 9/10 · confidence 88/100 · Mature dividend.
Trades below fair value with a meaningful cushion to the midpoint.
Fair value
$644
Margin of safety
+21.4%
Confidence
88/100
Moat
9/10
Educational research only - not investment advice, an offer, or a trade instruction. Confirm current data and do your own due diligence before acting.
$506.51Price
Low $506.7
Mid $644.43
High $782.83
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.
High switching costs for defense
High switching costs for defense platforms
Intangible assets via classified clearances
Intangible assets via classified clearances and patents
Cycle upside
Elevated geopolitical tensions driving global defense modernization and procurement.
§2 Olumsuz senaryo
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.
Bu tezin bozulabileceği yollar
Defense Budget Cuts
· Medium
Significant reduction in U.S. DoD spending prioritizing legacy system phase-outs over new procurement.
FV impact
-25%
Trigger
1-3 Years
Fixed-Price Cost Overruns
· High
Chronic inflation and supply chain bottlenecks drive severe losses on legacy fixed-price contracts.
FV impact
-15%
Trigger
6-12 Months
Geopolitical De-escalation
· Low
Unexpected rapid resolution of major global conflicts reducing international demand for tactical systems.
FV impact
-10%
Trigger
3-5 Years
İzlenecek erken uyarı sinyalleri
Metrik
Mevcut
Tetikleme eşiği
Operating margins persistently falling below 10%
Monitor
Deterioration versus the report thesis
Significant delays in F-35 deliveries or block upgrades
Monitor
Deterioration versus the report thesis
Negative free cash flow generation in consecutive quarters
LMT (LMT)'s intrinsic value is triangulated from discounted earnings at two cost-of-equity levels (strict CAPM with raw beta, moderate with adjusted beta), with owner earnings used as a floor for high-growth names.
Each model produces a per-share value; the composite range comes from a weighted blend driven by the archetype's model-applicability matrix. Cost of equity, terminal growth, and the deceleration curve are documented in the assumption ledger.
EPS-based models are discounted at cost of equity; FCFF models use WACC and then subtract net debt to bridge enterprise value to equity value. Each model is labelled with its discount-rate convention so the reader can verify the bridge.
Owner earnings (Buffett's definition) is net income plus depreciation and amortization minus maintenance capex. We do not subtract stock-based compensation again because net income already includes it; dilution is tracked separately via share-count growth.
FAQ
LMT — frequently asked questions
Based on our latest analysis, LMT looks meaningfully undervalued. The current price is $507 versus a composite fair-value midpoint of $644 (range $507–$783), which implies roughly 27.2% upside to the midpoint.
Our composite fair-value range for LMT is $507–$783, with a midpoint of $644. The range is triangulated across multiple valuation models (discounted earnings, forward earnings scenarios, peer multiples, and where applicable owner earnings or reverse DCF) and weighted by reliability for LMT's archetype.
Our current rating for LMT is Strong Buy with a confidence score of 88/100. LMT is rated Strong Buy at $506.51 versus the reconciled fair value midpoint of $644.43, implying +27.23% upside/downside. Confidence is separately disclosed at 88/100. This is research for educational purposes, not personalized investment advice.
The top risks our latest report flags for LMT are: Defense Budget Cuts; Fixed-Price Cost Overruns; Geopolitical De-escalation. The single biggest risk is Defense Budget Cuts: Significant reduction in U.S. DoD spending prioritizing legacy system phase-outs over new procurement.
Our current rating for LMT is Strong Buy, issued with a confidence score of 88/100 and a moat score of 9/10. The rating reflects the composite fair-value range ($507–$783) versus the current price of $507.
LMT is classified as a mature-dividend stock. Archetype determines how every downstream parameter — discount rate, terminal growth, deceleration curve, terminal multiple, scenario probability weights, scorecard weights, and which valuation models are prioritized — is calibrated for LMT.
