NEW YORK, January 8, 2026, 19:00 EST — After-hours
Lockheed Martin (LMT.N) shares climbed 4.3% to $518.44 in after-hours trading on Thursday, following a jittery day where the stock swung between $513.50 and $542.66. Defense stocks found some footing as investors balanced President Donald Trump’s call for a much larger military budget with his efforts to rein in dividends and buybacks.
A White House executive order from Jan. 7 says contractors who fall short on defense projects shouldn’t pay dividends or buy back stock until they “produce a superior product, on time and on budget.” It also tasks the Secretary of War with naming underperformers within 30 days and tightening payout and pay rules in future contracts within 60 days. The White House
Lockheed’s focus on returning money to shareholders sheds light on the stock’s recent moves. The company handed out roughly $2.3 billion in dividends by Sept. 20 and bought back about the same amount in shares through Oct. 21. Still, there’s $9.1 billion left on the table for more buybacks, according to data from LSEG compiled by Reuters.
Analysts highlighted a tug-of-war between a growing top line and tighter payout restrictions. RBC Capital Markets’ Ken Herbert and team noted a bigger defense budget “would offset the negative investor sentiment” caused by payout limits, though “there is significant uncertainty” about the final figure. Morgan Stanley’s Kristine Liwag said capital return limits are “an incremental negative” but “the size is manageable.” Meanwhile, Saxo Bank’s Neil Wilson remarked, “Geopolitics is the inescapable story of 2026 thus far.” Reuters
Lockheed has been ramping up capacity as demand grows. On Tuesday, the company announced a seven-year deal with the U.S. Department of War to boost annual production of PAC-3 missile interceptors — which stands for Patriot Advanced Capability — from around 600 to 2,000 units. It also reported delivering 620 Patriot missiles in 2025.
On Wednesday, Lockheed announced it delivered 191 F-35 fighter jets in 2025, shattering its previous record of 142. It also completed the TR-3 software upgrade while maintaining a fleet nearing 1,300 aircraft. “I’m immensely proud of the F-35 enterprise for delivering on our production commitments,” said Chauncey McIntosh, vice president and general manager of the F-35 Lightning II program. Media – Lockheed Martin
But investors still need to reckon with a policy that leaves broad discretion to officials on what counts as “underperforming.” Meanwhile, Trump has slammed what he calls “exorbitant and unjustifiable” executive pay packages. Lockheed’s F-35 program—one of the priciest U.S. defense projects—has seen costs climb and schedules slip, a stark reminder that delivery dates can miss the mark even as budgets swell. Reuters
Next up, Lockheed is set to release its fourth-quarter and full-year 2025 results before markets open on Jan. 29. The company will then roll out an 8:30 a.m. ET webcast featuring CEO Jim Taiclet, CFO Evan Scott, and investor relations head Maria Ricciardone. Traders will be tuning in closely for clues on cash flow and production capacity — and whether the new contracting pressures prompt any changes to the firm’s capital-return approach.
