Lockheed Martin (LMT) Stock Rallies on Fresh $1.14 Billion F‑35 Deal and India Expansion: Outlook for 2026

Date: December 9, 2025
Ticker: Lockheed Martin Corporation (NYSE: LMT)

Lockheed Martin stock is back in the spotlight after a wave of defense contracts, international deals and manufacturing investments that are reshaping investor expectations for 2026–2027.

In Tuesday’s session, Lockheed Martin shares are trading around $465 per share, up roughly 3% on the day, with volume above 1.3 million shares. ^[1] Despite the bounce, the stock remains down mid‑single digits year‑to‑date and below its record highs near $600 reached roughly a year ago. ^[2]

Beneath the short‑term price moves, the story on December 9 is about three big drivers:

A new $1.14 billion Pentagon contract modification for the F‑35 fighter program
A new C‑130J maintenance hub in India, in partnership with Tata Advanced Systems
Ongoing missile and hypersonics investments, including an automated manufacturing partnership with Hadrian and a new hypersonic systems lab in Alabama

Together, these reinforce the picture of Lockheed Martin as a cash‑generating defense heavyweight with a record backlog, a nearly 3% dividend yield and an active capital return program — but one that still faces valuation and defense‑budget risks.

Lockheed Martin Stock Today: A Rebound Built on Contracts

According to market data and Smartkarma’s latest market‑mover report, Lockheed Martin’s share price sits around $465.38, up about 2.9% on Tuesday, while still showing a year‑to‑date decline of roughly 4–5%. ^[3] A recent analysis from The Motley Fool noted that over the past six months, Lockheed’s shares have lagged the broader aerospace‑defense industry, falling about 6% versus industry growth of around 3%. ^[4]

In other words, today’s rally is happening against a backdrop of underperformance — a classic setup where fresh contract news and improving sentiment can trigger renewed interest from long‑term investors.

The Big Catalyst: $1.14 Billion More for the F‑35

The single most important piece of news around Lockheed Martin stock this week is the $1.14 billion contract modification tied to the F‑35 Lightning II fighter jet.

The U.S. Department of Defense has approved a modification to an existing advanced acquisition contract to fund long‑lead materials, parts and components for 198 F‑35 aircraft:

65 jets from Lot 20
133 jets from Lot 21 ^[5]

These aircraft are destined for the U.S. Air Force, Navy and Marine Corps, as well as F‑35 program partners and foreign military sales customers, extending the program’s production horizon through December 2030. ^[6]

Roughly 59% of the work will be performed at Lockheed’s F‑35 final assembly facility in Fort Worth, Texas, with additional work in California, the U.K., Italy, Florida, New Hampshire, Maryland, San Diego and other international locations. ^[7]

A detailed breakdown from the Pentagon shows a funding mix that includes: ^[8]

U.S. Air Force and Navy procurement funds for fiscal years 2025 and 2026
Over $550 million from foreign military sales customers
More than $220 million from cooperative program partners

This contract does not create new revenue in isolation — it builds on an existing November 2024 base award for F‑35 Lot 20 long‑lead items worth about $870 million, reinforcing the program’s multi‑year visibility. ^[9]

For Lockheed Martin stock, the key takeaway is that the F‑35 remains the company’s central growth engine, with multi‑year demand from both U.S. and allied air forces. In a recent Q3 update, management highlighted a record backlog of $179 billion, including strong F‑35 momentum and major awards for rotorcraft and missile defense programs. ^[10]

New India C‑130J MRO Hub: Deepening Global Support Revenue

On December 9, Lockheed Martin and Tata Advanced Systems announced the launch of the first C‑130J Super Hercules depot‑level Maintenance, Repair and Overhaul (MRO) hub in India, located in Bengaluru. ^[11]

Key points from the announcement:

The facility will provide full depot‑level sustainment for C‑130J aircraft: heavy maintenance, structural work, component overhaul and avionics upgrades.
It will initially support the Indian Air Force’s 12 C‑130J‑30s, then expand to KC‑130J and legacy C‑130 variants, positioning India as a regional sustainment hub for Indo‑Pacific operators. ^[12]
This builds on Tata’s existing role as the exclusive global source for C‑130J empennages, with more than 250 delivered through the Tata Lockheed Martin Aerostructures joint venture. ^[13]

Strategically, this move does three things for Lockheed Martin:

Increases high‑margin services revenue tied to the global C‑130 fleet.
Strengthens its industrial footprint in India at a time when New Delhi is evaluating a medium transport aircraft requirement for up to ~80 aircraft, where the C‑130J is a contender. ^[14]
Positions India as a logistics and sustainment hub for the broader Indo‑Pacific, making Lockheed a key partner for regional airlift operations. ^[15]

For investors, this is another piece of a bigger story: Lockheed is deliberately leaning into long‑tail service and sustainment contracts, which can be more stable and profitable than one‑off platform sales.

JASSM‑ER Sale to Italy: Deep‑Strike Missiles for F‑35s

Another December development with direct relevance to Lockheed Martin stock is the U.S. approval of a Foreign Military Sale to Italy for 100 JASSM‑ER (AGM‑158B/B‑2) cruise missiles, an estimated $301 million package where Lockheed Martin is the prime contractor. ^[16]

According to the U.S. Defense Security Cooperation Agency (DSCA), the JASSM‑ER missiles will: ^[17]

Equip Italy’s F‑35 Lightning II fleet and potentially other fighter platforms
Provide stand‑off strike capability at ranges approaching 1,000 km, giving Italy a much deeper conventional precision‑strike reach

The sale underscores Lockheed’s growing role in Europe’s long‑range strike and deterrence architecture, particularly as NATO members ramp up spending in response to the war in Ukraine and broader regional tensions.

Missile Production Ramp: Hadrian Partnership and PAC‑3/THAAD

On December 8, Lockheed Martin announced a Memorandum of Understanding with Hadrian, a highly automated “factory‑as‑a‑service” manufacturer, to boost production rates for key missile programs. ^[18]

Under the agreement:

Hadrian will embed a flexible machining and inspection cell at a Lockheed Missiles and Fire Control site.
The cell uses CNC machines, advanced robotics and Hadrian’s execution software to accelerate production of parts for PAC‑3 MSE®, THAAD, PrSM and GMLRS missiles. ^[19]

This partnership dovetails with Lockheed’s broader plan to ramp PAC‑3 MSE production to more than 600 interceptors in 2025 and up to 650 annually thereafter, responding to surging demand for air and missile defense from NATO and Indo‑Pacific allies. ^[20]

For shareholders, this matters because missile programs like PAC‑3 MSE and THAAD tend to carry strong margins and long‑term replenishment demand, especially as countries rebuild inventories depleted by recent conflicts.

Hypersonic Weapons: New Huntsville System Integration Lab

Lockheed Martin is also investing in next‑generation systems that could shape its long‑term growth beyond 2030.

On December 3, the company opened a 17,000‑square‑foot Hypersonics System Integration Lab (SIL) at its Huntsville, Alabama campus, a project costing about $17.1 million and part of a $529 million capital program for new facilities. ^[21]

According to Lockheed and multiple industry reports, the lab will: ^[22]

House advanced test equipment, simulation tools and an integration environment for U.S. hypersonic weapon programs
Help shorten development cycles and improve integration for Army and joint hypersonic requirements
Support Lockheed’s ambition to be a leading integrator in hypersonic strike and defense systems

While hypersonics remain a relatively small contributor to near‑term earnings, they are central to the company’s narrative about “next‑generation deterrence” — and could become a material revenue stream later in the decade.

Other Contract Activity: Rockets and Submarine Sensors

Beyond marquee headlines, Lockheed continues to collect contract wins that keep its core franchises busy:

A recent U.S. Army contract worth $52 million was awarded to Lockheed Martin in Grand Prairie, Texas, to maintain and operate systems tied to the High Mobility Artillery Rocket System (HIMARS) and Multiple Launch Rocket System (MLRS). ^[23]
BAE Systems announced a $36 million production contract from Lockheed Martin to supply Multifunction Modular Mast (MMM) sensor masts for U.S. Navy submarines, feeding into Lockheed’s AN/BLQ‑10 electronic warfare system. ^[24]

These deals are modest in dollar terms, but they demonstrate the depth of Lockheed’s installed base across land and maritime domains, and the steady flow of modernization and sustainment work that supports earnings stability.

Financial Picture: Record Backlog, Higher Dividend and Strong Cash Flow

Lockheed Martin’s third‑quarter 2025 earnings, released on October 21, provide the backbone for assessing the stock today. Management reported: ^[25]

Sales: $18.6 billion (up from $17.1 billion a year earlier)
Net earnings: $1.6 billion, or $6.95 per share, slightly above the prior year’s $6.80
Free cash flow: $3.3 billion in the quarter, up from $2.1 billion
Record backlog:$179 billion, more than 2.5 years of sales at current run rates

Lockheed also continues to return substantial cash to shareholders: in Q3 it: ^[26]

Paid $765 million in dividends
Repurchased $1.0 billion of stock
Increased its share repurchase authorization by $2 billion, bringing total authorization to about $9.1 billion
Raised the quarterly dividend 5%, from $3.30 to $3.45 per share, its 23rd consecutive annual increase

A separate dividend announcement confirmed the Q4 2025 dividend of $3.45, payable December 30 to shareholders of record on December 1. ^[27]

2025 Guidance and Valuation Snapshot

In its updated 2025 outlook, Lockheed guided to: ^[28]

Sales: roughly $74.25–$74.75 billion
Diluted EPS: about $22.15–$22.35
Free cash flow: around $6.6 billion

At a share price near $465, that implies:

Forward P/E of roughly 21x 2025 EPS guidance
An annualized dividend of $13.80 per share, for a dividend yield just under 3%
A free‑cash‑flow yield around 6%, using a market cap close to $105–108 billion and FCF guidance of $6.6 billion ^[29]

Those numbers place Lockheed in the camp of high‑quality, moderately valued defense blue chips: cheaper than high‑growth tech, but more expensive than some slower‑growing industrials, supported by unusually long revenue visibility.

Wall Street’s View: Modest Upside, Mostly “Hold” to “Buy”

Analyst sentiment on Lockheed Martin is constructive but not euphoric.

Data compiled by StockAnalysis shows that 14 analysts currently covering the stock have an average 12‑month price target of about $518.79, implying roughly 11–12% upside from current levels. Target prices range from $432 on the low end to $630 on the high end, with a consensus rating of “Buy.” ^[30]

MarketBeat’s latest institutional‑ownership update, published December 9, paints a slightly different picture: ^[31]

The firm calculates an average analyst target of roughly $515.50, with ratings distributed across Strong Buy, Buy, Hold and one Sell, resulting in an overall “Hold” consensus.
Recent price‑target changes have pushed some large‑bank estimates as high as $630 (Morgan Stanley) while other firms remain more cautious.

A separate Benzinga survey of 21 analysts puts the consensus target around $487, with a wide range from $332 (Goldman Sachs) to $610 (TD Cowen), and characterizes sentiment as “mixed but largely positive.” ^[32]

The takeaway is that Wall Street expects mid‑single‑ to low‑double‑digit upside, but views near‑term returns as heavily dependent on:

Continued contract flow (especially F‑35, missile defense and hypersonics)
Defense budget trajectories in the U.S. and among key allies
Execution on margin expansion and capital deployment

Growth Forecasts: Moderate Revenue, Faster Earnings

Looking beyond the next 12 months, analyst models aggregated by Simply Wall St suggest that Lockheed Martin is expected to: ^[33]

Grow earnings about 14.9% per year over the next few years
Grow EPS about 16.6% per year
Grow revenue about 3.3% per year, slower than the broader U.S. market
Sustain a very high forecast return on equity (above 100%), boosted by leverage and buybacks

That combination — slow top‑line growth but faster EPS growth — reflects Lockheed’s strategy of using:

High‑margin programs (like missile defense and classified space)
Operating efficiencies and digital manufacturing investments
Aggressive share repurchases

to drive per‑share metrics even in a relatively flat budget environment.

Institutional Investors Are Still Buying

Recent 13F‑based reports indicate that institutional appetite for Lockheed Martin remains strong.

On December 9, MarketBeat reported that Fayez Sarofim & Co increased its Lockheed Martin holdings by 26% in the second quarter to 19,461 shares worth about $9.0 million, while numerous smaller firms initiated new positions. ^[34] Another MarketBeat alert showed Federated Hermes Inc. boosting its stake by 148.6% to nearly 89,700 shares valued at $41.5 million. ^[35]

In total, institutional investors and hedge funds reportedly own around 74% of the company’s outstanding shares, underscoring Lockheed’s status as a core holding in many defense and dividend‑oriented portfolios. ^[36]

Key Risks for Lockheed Martin Stock

Despite the positive news flow, investors should keep several risks in mind:

Defense budget risk: Lockheed’s revenues are heavily tied to U.S. and allied defense budgets. Any shift in political priorities, deficit‑driven cuts or program cancellations could pressure growth. ^[37]
Program concentration: The F‑35 remains a dominant contributor. Delays, cost overruns or geopolitical pushback on the program could have outsized impact on earnings. ^[38]
Execution on ramps: The company is in the middle of aggressive production ramps for PAC‑3, GMLRS and other munitions. Manufacturing issues or supply‑chain disruptions could erode margins. ^[39]
Valuation risk: At roughly 21x forward 2025 earnings, Lockheed trades at a premium to some industrial peers, leaving less room for error if growth disappoints or if defense spending flattens. ^[40]
Geopolitical dependency: Much of the current demand is driven by high geopolitical tension. Any rapid easing could dampen urgency for new orders, even if long‑term replacement needs remain. ^[41]

Bottom Line: What December 9 Tells Us About LMT

As of December 9, 2025, Lockheed Martin looks like a classic defense blue chip at an interesting inflection point:

Near‑term catalysts: A fresh $1.14 billion F‑35 contract, a new India C‑130J MRO hub, the JASSM‑ER sale to Italy, and accelerated missile and hypersonics investments all reinforce revenue visibility and strategic relevance. ^[42]
Financial strength: A record $179 billion backlog, robust free cash flow, a growing dividend and ongoing buybacks provide a solid underpinning for total returns. ^[43]
Valuation and growth: With a ~3% dividend yield, ~6% FCF yield and analyst‑projected mid‑teens EPS growth, expected returns look reasonable but not spectacular, especially given the macro and budget uncertainties. ^[44]

For investors tracking Lockheed Martin on Google News or Discover, today’s rally is more than a one‑day headline. It reflects a deeper pattern: the company is steadily converting geopolitical demand into long‑term contracts, modernizing its manufacturing base and returning significant cash to shareholders — all while navigating the inherent cyclicality and political risk of the defense business.