Lockheed Martin shares rose 9% to $602.75 on Thursday after third-quarter results beat estimates and the company raised its 2026 outlook, supported by a record backlog of $292 billion. Sales reached $20.7 billion, up 11%, with earnings of $7.97 per share and free cash flow of $3.0 billion, while Missiles and Fire Control revenue jumped 24% on higher PAC-3 and THAAD production. The backlog includes roughly $52.5 billion tied to a multi-year PAC-3 interceptor award, and a 10-year framework with the U.S. Department of War covers 850 F-35 aircraft, though it is not yet a finalized contract. RTX rose 2% to $195.54 and Northrop Grumman gained 3% to $553.29, while the aerospace and defense ETF edged up 0.21% as the S&P 500 ETF fell 0.82%. The article notes that the sector's gains reflected broader interest rather than company-specific news from peers, and that defense stocks remain sensitive to budget cycles and contract timing.
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| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/21/2026 | 773.13 |
| Change that session | +0.53% |
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- Lockheed Martin’s Business Is Booming as Backlog Hits Nearly $300 Billion
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The article argues that Lockheed Martin (LMT) is an underrated stock, having risen about 15% this year while still offering good value. In 2022, when the market fell, its shares rose over 40% including dividends, while the S&P 500 posted a total return of negative 18%, helped by its close ties to the U.S. government and strong defense spending. In the quarter ended June 28, revenue reached $20.1 billion, up 11% year over year. The stock trades at a forward P/E of about 16, below the S&P 500 average of more than 19, and its dividend yields 2.6% versus roughly 1% for the index. Lockheed has raised its dividend for 24 consecutive years.
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Lockheed Martin's backlog stands at $230 billion, nearly $37 billion above the end of 2025 and about 2.8 times the midpoint of its 2026 revenue guidance of $80.75 billion. Almost all of the increase came from the missiles and fire control (MFC) segment, which carries the company's highest profit margin, suggesting improving backlog margins. Growth was driven by mature systems, including a $35 billion THAAD interceptor award in June and a $4.7 billion PAC-3 contract, where the main risk is manufacturing at scale rather than development. A $53.86 billion PAC-3 order placed after the second quarter is not included in the $230 billion figure. The author concludes the backlog is lower-risk and potentially higher-margin than in past years, supporting the investment case.
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