Lockheed Martin (LMT) shares ended the last trading session 4.3% higher at $518.44. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.2% gain over the past four weeks.
Lockheed Martin remains one of the largest U.S. defense contractors with a steady order flow from the Pentagon and other U.S. allies. Apart from enjoying a strong forte on the domestic front, Lockheed Martin’s products are also well-acclaimed in the international market.
LMT’s stock rose because of sharp increase in U.S. defense budget. President Trump proposed to raise military spending to about $1.5 trillion in 2027, up from $901 billion in 2026. As a result, markets reacted positively, driving defense stocks higher on expectations of bigger order backlogs and stronger long-term earnings growth.
This aerospace and defense company is expected to post quarterly earnings of $6.33 per share in its upcoming report, which represents a year-over-year change of -17.5%. Revenues are expected to be $19.74 billion, up 6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Lockheed, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LMT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Lockheed is a member of the Zacks Aerospace - Defense industry. One other stock in the same industry, Joby Aviation, Inc. (JOBY), finished the last trading session 1.9% lower at $15.25. JOBY has returned 3.6% over the past month.
For Joby Aviation, Inc., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.2. This represents a change of -5.3% from what the company reported a year ago. Joby Aviation, Inc. currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
