LMT US S&P 500Russell 1000 Earnings call · transcribed from the recording
Lockheed Martin (LMT) · Q3 2026 results and valuation
Share price: $610.05 · 2026-11-11
Lockheed Martin is an aerospace and defense technology company that develops and maintains aircraft, missile and fire control systems, and space technologies. The company provides defense, intelligence, and cybersecurity solutions to the U.S. Government and international customers for civil and commercial applications. Source: 10-K annual report (2026-01-29)
Results Q3 2026 vs Q2 2026 · previous quarter · published 22 Oct 2026 and 23 Jul 2026
Net income up 0.5% on the previous quarter. Management sounded restrained, in its script and in answers to analysts.
1 · Numbers
+0.5%
Net income vs Q2 2026
Outlook given
Net income 1.84B vs 1.84B
Revenue +3.2%
Why Against the same quarter last year (+14.0%), net income rose primarily due to higher segment operating profit driven by volume at MFC and Aeronautics, and a favorable profit adjustment in RMS upon resolution of a contracting matter.
2 · How management spoke
Restrained
Less upbeat than 69% of company calls
Answers to analysts: upbeat, in line with the script.
Last call it was different: the answers were less upbeat than the script.
3 · What stood out
Lockheed Martin raised its full-year sales forecast to a range of $80 to $82 billion, representing approximately 8% growth at the midpoint.
Valuation
Is Lockheed Martin undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 4.4% growth a year (3-year revenue growth), the model's fair value is $394.42 a share — the stock trades 55% above it. Today's price assumes 9.5% growth a year.
Current price
$610.05
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+9.5% for 10 yrs
Fair value / share
$394.42
Buy below
$295.81
Price vs fair value
Overvalued 55%
Price vs buy-below price
Overvalued 106%
Management expects
Sales +8% · from the Q3 2026 report: “LMT raised its full-year sales forecast to a range of $80 to $82 billion, representing approximately 8% growth at the midpoint.”
A guidance figure for sales, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
LMT raised its full-year sales forecast to a range of $80 to $82 billion, representing approximately 8% growth at the midpoint.
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Figure
Quarter sales rose 11% year-over-year to $20.7 billion due to higher volume across every segment, including F-35 production, munitions ramps, radar awards, and growth in space systems.
Source quote
“Third quarter sales rose 11% year-over-year to $20.7 billion, driven by higher volume across every segment, including F-35 production and sustainment at Aeronautics, MFC munitions production ramps, new radar awards at RMS, and growth on fleet ballistic missile and next-generation interceptor at space.”
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Figure
Segment operating profit reached $2.2 billion with a 10.8% margin, driven by volume in MFC and Aeronautics and a favorable profit adjustment in RMS.
Source quote
“Segment operating profit was $2.2 billion, with an operating margin of 10.8%, driven by volume at MFC and Aeronautics and a favorable profit adjustment in RMS upon resolution of a contracting matter.”
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Figure
F-35 sustainment will be a key pacing item for growth due to increased budget support from the customer and investments in that capability.
Source quote
“And the key pacing item there for growth will continue to be F-35 sustainment where we've seen some really good budget support from our customer as we've also invested in that key capability.”
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Figure
The F-35 solution aims to integrate sixth-generation technologies to achieve 80% of a sixth-generation clean sheet aircraft's capabilities at 50% of the cost.
Source quote
“The second part of the F-35 solution is that will now enable us to add in six generation key technologies and try to get to 80% of what a sixth generation clean sheet aircraft would look like at 50% of that clean sheet aircraft cost.”
4 more
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Figure
The precision strike missile increment 2 moved from flight tests in March and August to a $1.2 billion production contract within the same year.
Source quote
“At MFC, our precision strike missile increment 2 went from flight tests in March and August to a 1.2 billion dollar production contract within the same year.”
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Figure
Lockheed Martin was awarded an $800 million contract in Australia for the Air 6500 joint air battle management system, demonstrating demand for its integration expertise.
Source quote
“In Australia, we were awarded an $800 million contract for the next tranche of Air 6500, which is its joint air battle management system, demonstrating that our integration expertise is in demand from our allies as well.”
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Figure
LMT is investing more than $8 billion through 2030 to modernize more than 20 facilities, expand its supply chain, and grow its workforce.
Source quote
“All of this is part of more than the $8 billion investment we are making through 2030 to modernize more than 20 facilities, expand our supply chain, and grow our workforce.”
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Figure
LMT awarded Boeing a $14.7 billion contract to triple Pac-3 seeker production and a $1.6 billion contract to Northrop Grumman for propulsion and other missile components.
Source quote
“Since the quarter closed, we also awarded Boeing a contract for $14.7 billion to triple Pac-3 seeker production and a $1.6 billion contract to Northrop Grumman for propulsion and other missile components.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“And so our business is already performing at this level today with a track record of execution and the visibility, growth, and cash generation to carry that momentum well into...”
“Lockheed Mart delivered another quarter of strong program performance, growing both sales and profit by double digits, reflecting execution to the plan that we previously laid out for you.”
“Our outlook for segment operating profit is also raised again, as our solid Q3 execution drives increases at three of our four segments.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-27)
| Metric | Q3 2026period end 2026-09-27 | Q2 2026period end 2026-06-28 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 20.71B | 20.06B | +3.2% | 18.61B | +11.3% |
| Gross profit | 2.44B | 2.45B | −0.4% | 2.24B | +8.8% |
| Operating income | 2.44B | 2.48B | −1.5% | 2.28B | +7.1% |
| Net income | 1.84B | 1.84B | +0.5% | 1.62B | +14.0% |
| EPS | 7.97 | 7.94 | +0.4% | 6.95 | +14.7% |
| P/E today 20.1 | 18.5 | 18.7 | −0.2 | 27.2 | −8.7 |
Topics
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Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Lockheed Martin reported third-quarter 2026 sales of $20.7 billion, up 11% from $18.6 billion in the third quarter of 2025, and net earnings of $1.8 billion, up 14% from $1.6 billion.
- Material agreement · SEC 8-K
Lockheed Martin Corporation entered into a new 364-day revolving credit agreement for a $2.25 billion unsecured credit facility on August 24, 2026.
- Results of operations · SEC 8-K
Lockheed Martin reported second-quarter 2026 sales of $20.1 billion, an 11% increase from $18.2 billion in the second quarter of 2025, with net earnings of $1.8 billion compared to $342 million a year earlier.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Lockheed Martin reported sales of $18.0 billion, unchanged from $18.0 billion in the first quarter of 2025, and net earnings of $1.5 billion, down from $1.7 billion a year earlier.
- Results of operations · SEC 8-K
- Other events · SEC 8-K
Lockheed Martin executed buy-out conversions of group annuity contracts, transferring approximately $900 million of gross pension obligations to insurance companies and expecting a non-cash, non-operating pretax settlement charge of approximately $480 million in the fourth quarter of 2025.
- Material agreement · SEC 8-K
Lockheed Martin Corporation entered into a new 364-day revolving credit agreement for a $3.0 billion unsecured credit facility on December 5, 2025.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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next year
flight demonstrations for the Vectis aircraft
Source quote
“and have flight demonstrations scheduled for next year.”
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by 2030
fielding of the Next Generation Interceptor Program
Source quote
“keeping that program on track for fielding by 2030, strengthening the homeland missile defense and advancing a program essential to the nature's future.”
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over the next three years
adding 2 million square feet of facilities to support production growth across eight sites
Source quote
“we are putting it to work, adding 2 million square feet, again, 2 million square feet of facilities to support production growth across eight sites over the next three years, and these are in places like our Munition Center in Troy, Alabama.”
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This year alone
hiring and training over 3,000 new team members across MSC sites
Source quote
“This year alone, we are hiring and training over 3,000 new team members across MSC sites.”
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through 2030
more than $8 billion investment to modernize more than 20 facilities, expand our supply chain, and grow our workforce
Source quote
“All of this is part of more than the $8 billion investment we are making through 2030 to modernize more than 20 facilities, expand our supply chain, and grow our workforce.”