Lockheed Martin Price Target Slashed to $571 by Citi: Is the Defense Trade Stuck in Neutral?

"Citi lowered its price target on Lockheed Martin to $571 from $675, while maintaining a Neutral rating. The price target cut lands as LMT stock trades at $518.41, well below the firm's revised mark. For prudent investors, the takeaway on LMT stock is that the defense trade may stay range-bound until the macro backdrop clears. Geopolitical noise, budget continuing-resolution risk, and program-specific scrutiny are weighing on near-term sentiment, even with global defense demand intact."

"Citi refreshed its models across the aerospace and defense sector and laid out a clear sequencing call: aerospace rallies first, defense follows. For Lockheed Martin, the firm doesn't expect an "immediate V-shaped rally" without a resolution to the Middle East conflict, even though it sees buying opportunities after the recent selloffs. That framework explains why Lockheed Martin's price target was trimmed despite a constructive long-term setup. Geopolitical noise, budget continuing-resolution risk, and program-specific scrutiny are muting near-term multiples, even with global defense demand intact."

"Lockheed Martin carries a market cap near $118.97 billion and operates across Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. Q1 2026 revenue rose just 0.3% year over year to $18.02 billion, and EPS of $6.44 missed the $6.73 consensus. Lockheed Martin's margins compressed as segment operating margin slipped from 12% to 10%, weighed down by a $125 million unfavorable F-16 adjustment and pressure on C-130, CH-53K, and Seahawk programs. Yet, management reaffirmed full-year sales guidance of $77.5 billion to $80 billion against a record $194 billion backlog."

Citi lowered its price target for Lockheed Martin to $571 from $675 and kept a Neutral rating. The stock trades below the revised target, and defense shares may remain range-bound until macro conditions improve. Geopolitical noise, continuing-resolution budget risk, and program-specific scrutiny are weighing on near-term sentiment even as global defense demand stays intact. Citi expects aerospace to rally first, with defense following, and does not anticipate an immediate V-shaped rebound without resolution of the Middle East conflict. Lockheed Martin reported Q1 2026 revenue of $18.02 billion, up 0.3% year over year, and EPS of $6.44, below consensus. Margins compressed as segment operating margin fell from 12% to 10% due to an unfavorable F-16 adjustment and pressure on multiple aircraft and helicopter programs, while full-year sales guidance was reaffirmed.

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