UBS analyst Gavin Parsons upgraded Lockheed Martin to “buy” with a $674 price target, implying 26% upside, as sales of missiles, munitions, F-35 fighters, helicopters and Trident missiles drive 9% sales growth over the next few years. The stock rose another 2.5% by 1:10 p.m. ET, its third straight gain. In a new note, Parsons reiterated that the Missiles and Fire Control (MFC) division could grow 150% in size over five years, with sales rising 20% annually through 2030, and PAC-3, THAAD and JASSM/LRASM adding $7bn, $5bn and $3bn respectively. UBS says few investors expect such growth, so Lockheed could keep delivering positive earnings surprises. MFC's 13% operating margin, above the company's 10.7%, suggests profits could grow faster than the 17% Wall Street expects, and the author considers the stock attractive at under 20 times earnings.
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