2024-05-09 04:37:30 ET
Lockheed Martin Corp (NYSE:LMT) has been a solid player in the aerospace and defense sector. But in the last two years, its stock hasn’t really gone anywhere, hovering around $465. That raises a big question: Is it still a good buy?
With a market value topping $110 billion, there’s no doubt that Lockheed Martin is a defense giant. They make all sorts of important military stuff, from cutting-edge aircraft to critical missile systems. Plus, they’ve been increasing their sales over the years, going from $39.9 billion in 2014 to $67.6 billion in 2023.
In the first quarter of 2024, the company did better than expected in sales, hauling in $17.2 billion, which beat forecasts by a hefty $1.2 billion. But their profit margins dropped a bit, mainly due to cost overruns in the Aeronautics and Missiles and Fire Control divisions. So, while sales are up, they’re not making as much profit as before.
Apart from these cost overruns, there’s always the risk of economic downturns affecting defense spending. Also, competition in the defense industry is heating up, which could squeeze Lockheed Martin’s profit margins further down the line.
Having gone through recent fundamentals of the company, let’s dive into the charts to see what they say about Lockheed Martin’s stock. Are there any trends or patterns that might give us a clue about where it’s headed next?
Breaking out of the range
If we see LMT’s long-term charts, we can see that the stock has mostly been range-bound between $400 and $500 for more than 2 years now. Investors who have invested in the stock in the stock would have made little to no money in terms of price appreciation.
We mention price appreciation because LMT pays dividends, which currently translates into an annual dividend yield of 2.7%. So, they would have made some returns in the form of dividends.
If you are an investor looking to buy LMT stock, our advice would be for you to wait until it breaks above $500 convincingly, i.e., closes above that level for 2-3 days.
If you are someone who has bought LMT’s stock in the last 2 years or before that, we suggest holding on to the stock at current levels but selling it if it goes below $380.
Upward strength continues in the short-term
On the short-term hourly or 2-hourly charts, LMT’s stock looks much better. The strong has been on a strong upward trend since making a low of $413.93 on February 15. But, it has faced resistance trading above the $470 level.
Short-term traders who want to go long the stock can do so if the stock closes above $470 for a day and place a stop loss at $442. The first profit target is $498. However, if the stock crosses above $500, they can expect it to reach $536.4 in the next few weeks.
Traders who are bearish on the stock must wait for it to either break the short-term bullish trendline, shown in the chart, or short the stock once it reaches above $485 and keep a stop loss at $502. If the stock starts falling, its immediate support levels are $442 and $414, which should be their profit targets.
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