Is It Time to Buy Lockheed Martin?

Lockheed Martin Corp. (LMT) has underperformed broad averages since the 2020 election, with the Biden administration expected to focus on domestic priorities and put a lid on defense spending. That hopeful sentiment got blown out of the water over the weekend, with the rapid fall of Afghanistan setting the stage for a resurgence of Middle East terrorism. Reverberations will be felt worldwide in the next few years, with the usual cast of ‘bad actors’ sensing American weakness and vulnerability.

World’s Largest Defense Contractor

Headquartered in Maryland, Lockheed is the world’s largest defense contractor, with $1.36 billion in 2019 government contracts. Their product catalog is legendary in military circles, with state-of-the-art missile systems and fighter jet fleets displaying colorful monikers like Lightning, Nighthawk, and Starfighter. Even so, the stock hasn’t budged in the last two years, held down by shifting sentiment, the pandemic, and political polarization.

The company beat Q2 2021 estimates in July and raised fiscal year guidance but that didn’t end a steady downtick that’s now reached a five-month low. Cutting EPS guidance just one week after earnings didn’t help, with a previously undisclosed charge of $4.75 per share to reduce outstanding pension obligations. CFO Kenneth R. Possenriede retired at the same time, suggesting some instability in the otherwise rock-solid management team.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 12 ‘Buy’, 1 ‘Overweight’, and 9 ‘Hold’ recommendations. Price targets currently range from a low of $385 to a Street-high $479 while the stock is set to open Monday’s session more than $25 below the low target. This depressed placement highlights investor apathy after four years of the more hawkish Trump administration and uncertainty about America’s role on the world stage.

Lockheed Martin posted superior returns between 2013 and February 2020’s all-time high at 442.53, ahead of a steep slide that shed nearly 180 points in just six weeks. It bounced within 30 points of resistance in June 2020 and settled into an oscillating pattern that’s carved two lower highs and one higher low. Overall, this looks like a long-term consolidation that’s unlikely to yield a breakout or breakdown in the next year, unless America gets a 9-11 style ‘wake-up call’.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held Lockheed Martin in a family account at the time of publication. 

Monstrous Earnings Week Ahead: Tesla, Google, Microsoft, Apple, Facebook and Amazon in Focus

Earnings Calendar For The Week Of July 26

Monday (July 26)

IN THE SPOTLIGHT: TESLA, LOCKHEED MARTIN

TESLA: The California-based electric vehicle and clean energy company is expected to report its second-quarter earnings of $0.94 per share, which represents year-over-year growth of over 113% from $0.44 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer would post revenue growth of about 90% to around $11.4 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue. Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~18% by 2030 and ~35% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcst, at $900 Tesla trades at ~29x EV/EBITDA in 2025 and ~6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”

LOCKHEED MARTIN: The Bethesda, Maryland-based global security and aerospace company is expected to report its second-quarter earnings of $6.53 per share, which represents year-over-year growth of about 13% from $5.79 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 4% to around $16.9 billion. It is worth noting that the aerospace company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 26

Ticker Company EPS Forecast
PSON Pearson £8.40
LMT Lockheed Martin $6.53
PHG Koninklijke Philips $0.47
CHKP Check Point Software Technologies $1.56
LII Lennox International $4.39
RPM RPM International $1.26
BOH Bank of Hawaii $1.31
DORM Dorman Products $1.04
TSLA Tesla $0.94
KOF Coca Cola Femsa Sab De Cv $14.53
ARE Alexandria Real Estate Equities $0.62
AMP Ameriprise Financial $5.20
SUI Sun Communities $0.57
BRO Brown & Brown $0.40
UHS Universal Health Services $2.69
PKG Packaging Of America $1.77
FFIV F5 Networks $2.46
AGNC American Capital Agency $0.65
ACC American Campus Communities -$0.07
AMKR Amkor Technology $0.45
CR Crane $1.39
ADC Agree Realty $0.47
SSD Simpson Manufacturing $1.61
AXTA Axalta Coating Systems $0.46
TNET TriNet $0.81
HXL Hexcel $0.01
RRC Range Resources $0.25
PCH Potlatch $2.55
JJSF J&J Snack Foods $0.76
IBTX Independent Bank $1.31
CATY Cathay General Bancorp $0.83
AIN Albany International $0.73
CALX Calix $0.27
IBA Industrias Bachoco Sab De Cv $1.22
ARI Apollo Commercial Real Est Finance $0.36
PPERY PT Bank Mandiri Persero TBK $0.18
CDNS Cadence Design Systems $0.76
OTIS Otis Worldwide Corp $0.72
RYAAY Ryanair -$1.46
HAS Hasbro $0.48
WWD Woodward $0.98
ACKAY Arcelik ADR $0.46
GT Goodyear Tire & Rubber $0.16
TTM Tata Motors -$0.31
CBU Community Bank System $0.80
SANM Sanmina $0.91
BDN Brandywine Realty $0.01
FRME First Merchants $0.91

Tuesday (July 27)

IN THE SPOTLIGHT: GOOGLE (ALPHABET), MICROSOFT, APPLE

GOOGLE (ALPHABET): The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago. The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier.

“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premise portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.

Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.

APPLE: The consumer electronics giant would post its fiscal third-quarter earnings of $1.01 per share, which represents year-over-year growth of over 55% from $0.65 per share seen in the same quarter a year ago.

The iPhone manufacturer would post revenue growth of over 20% to around $73.3 billion up from $59.69 billion a year earlier. It is worth noting that the company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 27

Ticker Company EPS Forecast
SIRI Sirius XM $0.07
IEX IDEX $1.62
PCAR PACCAR $1.40
MMM 3M $2.29
MSCI Msci $2.31
ENPH Enphase Energy $0.42
LSXMK Liberty Media SiriusXM C $0.36
LSXMA Liberty Media SiriusXM A $0.48
CVLT Commvault Systems $0.52
LOGI Logitech Internationalusa $0.90
MXIM Maxim Integrated Products $0.85
ST Sensata Technologies $0.88
CNC Centene $1.22
UPS United Parcel Service $2.79
TRU TransUnion $0.91
SHW Sherwin-Williams $2.67
IVZ Invesco $0.70
FELE Franklin Electric $0.80
LW Lamb Weston Holdings Inc $0.42
IQV IQVIA Holdings Inc $2.07
RTX Raytheon Technologies Corp $0.93
ENTG Entegris $0.79
LECO Lincoln Electric $1.48
FISV Fiserv $1.28
DTE DTE Energy $1.36
GE General Electric $0.03
ROK Rockwell Automation $2.09
WM Waste Management $1.19
SWK Stanley Black & Decker $2.88
ADM Archer-Daniels Midland $1.02
HUBB Hubbell $2.16
PNR Pentair Ordinary Share $0.79
BSX Boston Scientific $0.37
ECL Ecolab $1.21
PPBI Pacific Premier Bancorp $0.71
GPK Graphic Packaging $0.28
PHM PulteGroup $1.73
AWI Armstrong World Industries $1.05
RGEN Repligen $0.52
SFNC Simmons First National $0.52
SSTK Shutterstock $0.68
ABG Asbury Automotive $4.60
MPWR Monolithic Power Systems $1.69
CHRW C.H. Robinson Worldwide $1.33
MANH Manhattan Associates $0.43
GOOG Alphabet $19.33
CB Chubb $3.00
AMD Advanced Micro Devices $0.54
PGRE Paramount Group -$0.05
SBUX Starbucks $0.77
CAKE Cheesecake Factory $0.72
EGP EastGroup Properties $0.67
AXS Axis Capital $1.42
WSBC WesBanco $0.75
HIW Highwoods Properties $0.33
STAG STAG Industrial $0.12
VIST Vista Oil Gas $0.15
NAVI Navient $0.85
EHC Encompass Health Corp $0.98
OMAB Grupo Aeroportuario Del Centro Nort $11.31
NOV National Oilwell Varco -$0.13
V Visa $1.34
GOOGL Alphabet $19.24
BXP Boston Properties $0.57
AAT American Assets $0.11
MSFT Microsoft $1.91
JNPR Juniper Networks $0.39
BYD Boyd Gaming $0.90
MASI Masimo $0.90
MTDR Matador Resources $0.75
CSGP CoStar $0.23
FIBK First Interstate BancSystem $0.72
OLN Olin $1.44
EQR Equity Residential $0.19
EXR Extra Space Storage $1.06
EPR EPR Properties $0.06
USNA USANA Health Sciences $1.72
THG Hanover $2.38
UMBF UMB Financial $1.75
CHE Chemed $4.29
SYK Stryker $2.13
MDLZ Mondelez International $0.65
MAT Mattel -$0.06
PFG Principal Financial $1.52
AAPL Apple $1.01
TER Teradyne $1.75
VIV Telefonica Brasil $0.13
ASH Ashland $1.31
GLW Corning $0.51
PII Polaris Industries $2.15
JBLU JetBlue Airways -$0.74
RDY Drreddys Laboratories $0.55
XRX Xerox $0.40
CIT CIT $0.86
SID Companhia Siderurgica Nacional $0.86
RNST Renasant $0.77

Wednesday (July 28)

IN THE SPOTLIGHT: FACEBOOK

The world’s largest online social network is expected to report its second-quarter earnings of $3.04 per share, which represents year-over-year growth of about 70% from $1.80 per share seen in the same quarter a year ago. The Menlo Park, California-based social media conglomerate would post revenue growth of over 49% to around $28.0 billion.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~33% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$18bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~39% CAGR (2019-2022).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 28

Ticker Company EPS Forecast
PTC PTC $0.63
URI United Rentals $4.90
ENSG Ensign $0.88
ALKS ALKERMES $0.12
TYL Tyler Technologies $1.63
AMG Affiliated Managers $3.85
SF Stifel Financial $1.38
FIX Comfort Systems USA $0.91
MSA MSA Safety $1.04
CBD Companhia Brasileira De Distrib $0.04
ALGT Allegiant Travel $2.55
GD General Dynamics $2.55
HES Hess $0.11
PFE Pfizer $0.97
QCOM Qualcomm $1.68
HP Helmerich & Payne -$0.56
UMC United Microelectronics $0.14
BA Boeing -$0.81
EQIX Equinix $1.87
DB Deutsche Bank $0.33
RJF Raymond James Financial $2.27
SAN Banco Santander $0.13
HNP Huaneng Power International $0.86
LRCX Lam Research $7.59
APH Amphenol $0.55
EVR Evercore Partners $2.71
PPC Pilgrim’s Pride $0.52
R Ryder System $1.38
NSC Norfolk Southern $2.97
FORM FormFactor $0.33
SHOO Steven Madden $0.31
SCI Service International $0.67
ADP ADP $1.14
MNRO Monro Muffler Brake $0.52
SLAB Silicon Laboratories $0.93
BXMT Blackstone Mortgage $0.60
PAG Penske Automotive $2.76
ROL Rollins $0.18
BCS Barclays $0.54
CAJ Canon $0.33
XLNX Xilinx $0.78
HUM Humana $6.82
AVY Avery Dennison $2.05
NYCB New York Community Bancorp $0.30
SCL Stepan $1.84
GSK Glaxosmithkline $0.55
CME CME $1.61
TEVA Teva Pharmaceutical Industries $0.59
MCD McDonalds $2.11
BSBR Banco Santander Brasil $0.20
EXP Eagle Materials $2.07
DT Dynatrace Holdings $0.15
EEFT Euronet Worldwide $0.65
SPOT Spotify -$0.38
OC Owens Corning $2.14
FMX Fomento Economico Mexicano Sab $14.29
BMY Bristol-Myers Squibb $1.89
VRTS Virtus Investment Partners $8.11
GRMN Garmin $1.26
SIX Swiss Exchange -$0.22
CCJ Cameco USA -$0.05
TDY Teledyne Technologies $2.70
IART Integra LifeSciences $0.66
GNRC Generac $2.30
MCO Moody’s $2.77
VRT Veritas Pharma $0.24
EPD Enterprise Products Partners $0.50
GIB CGI Group USA $1.08
TMO Thermo Fisher Scientific $5.47
TEL TE Connectivity $1.58
SLGN Silgan $0.83
PB Prosperity Bancshares $1.39
ODFL Old Dominion Freight Line $2.17
BG Bunge $1.62
LFUS Littelfuse $2.24
CNMD CONMED $0.62
CP Canadian Pacific Railway USA $1.00
AVB AvalonBay Communities $0.74
ALGN Align Technology $2.52
AM Antero Midstream Partners $0.19
CNO CNO Financial Group $0.54
CINF Cincinnati Financial $0.99
SSNC SS&C Technologies $1.14
MTH Meritage Homes $3.28
TTEK Tetra Tech $0.88
MKSI MKS Instruments $2.95
ROIC Retail Opportunity Investments $0.06
SIGI Selective $1.23
VAC Marriottacations Worldwide $0.89
PDM Piedmont Office Realty $0.05
IRBT Irobot $0.32
UDR UDR $0.01
EXAS Exact Sciences -$0.75
MOH Molina Healthcare $3.39
EQT EQT $0.04
MXL MaxLinear $0.50
IR Ingersoll Rand $0.42
AGI Alamos Gold $0.11
MAA Mid-America Apartment Communities $0.55
KGC Kinross Gold USA $0.13
ESRT Empire State Realty -$0.01
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
CRUS Cirrus Logic $0.39
MUSA Murphy USA $3.21
RE Everest Re $8.58
VALE Vale $1.47
DRE Duke Realty $0.19
PYPL PayPal $1.12
NOW ServiceNow $1.21
CCS Century Communities $2.84
NLY Annaly Capital Management $0.27
TROX Tronox $0.52
XPO XPO Logistics $1.66
SAVE Spirit Airlines -$0.86
PAC Grupo Aeroportuario Del Pacifico $1.14
CHX ChampionX Corp $0.10
NUVA NuVasive $0.44
FBHS Fortune Brands Home Security $1.39
NOVA Nova Mentis Life Science Corp -$0.24
FB Facebook $3.04
ACGL Arch Capital $0.84
CONE CyrusOne $0.04
AR Antero Resources $0.20
AEM Agnico Eagle Mines USA $0.59
RBC Regal Beloit Corporation $2.07
PEGA Pegasystems -$0.18
AFL Aflac $1.28
PKI PerkinElmer $2.44
CHDN Churchill Downs $2.51
PEB Pebblebrook Hotel -$0.65
CTSH Cognizant Technology Solutions $0.96
HOLX Hologic $1.12
KRC Kilroy Realty $0.29
ALSN Allison Transmission $0.93
F Ford Motor -$0.04
ASGN On Assignment $1.29
HIG Hartford Financial Services $1.34
ORLY O’Reilly Automotive $7.51
ISBC Investors Bancorp $0.31

Thursday (July 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has beaten earnings per share (EPS) estimates at all times in the last four quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 29

Ticker Company EPS Forecast
RLGY Realogy $1.08
VSTO Vista Outdoor $0.90
AGCO AGCO $2.20
PCG PG&E $0.28
MATX Matson $2.96
PRFT Perficient $0.79
NATI National Instruments $0.05
GPI Group 1 Automotive $7.59
CFX Colfax $0.53
CMS CMS Energy Corporation $0.46
LYG Lloyds Banking $0.14
MHK Mohawk Industries $3.59
EBS Emergent BioSolutions $1.41
TXT Textron $0.65
AUOTY AU Optronics $0.56
CMCSA Comcast $0.66
VLO Valero Energy $0.17
CG Carlyle $0.60
ABEV Ambev $0.02
NLSN Nielsen $0.36
MTD Mettler Toledo International $7.62
ADS Alliance Data Systems $3.68
FTNT Fortinet $0.88
FTV Fortive Corp $0.60
ASX Advanced Semiconductor Engineering $0.16
LKQ LKQ $0.75
ERJ Embraer -$0.26
TFX Teleflex $2.87
CARR Carrier Global Corp $0.55
CX Cemex Sab De Cv $0.16
ORAN Orange $0.18
CVE Cenovus Energy USA $0.26
MT Arcelormittal $2.52
MA Mastercard $1.74
KBR KBR $0.50
HOCPY Hoya Corp $0.85
YUM Yum Brands $0.96
EIX Edison International $1.02
EME EMCOR $1.58
AGIO Agios Pharmaceuticals -$1.35
KPELY Keppel Corporation $0.18
BUD Anheuser-Busch $0.87
CS Credit Suisse $0.22
DANOY Danone PK $0.45
SNY Sanofi $0.77
AZN Astrazeneca $0.45
TEF Telefonica $0.14
STM Stmicroelectronics $0.37
GRFS Grifolsbarcelona $0.26
THRM Gentherm $0.65
WWW Wolverine World Wide $0.49
CNX Consol Energy $0.24
CBRE CBRE Group Inc $0.77
TAP Molson Coors Brewing $1.35
VC Visteon $0.05
KEX Kirby $0.14
TREE LendingTree -$0.63
SAH Sonic Automotive $1.38
HSY Hershey $1.42
AMT American Tower $1.27
TW Towers Watson $0.39
OSK Oshkosh $2.25
MAS Masco $1.04
MO Altria $1.18
TROW T. Rowe Price $3.19
CTXS Citrix Systems $1.22
SPGI S&P Global Inc $3.26
BAX Baxter International $0.75
ICE Intercontinental Exchange $1.16
SO Southern Co. $0.79
NTCT Netscout Systems $0.18
GOL Gol Linhas Aereas Inteligentes -$0.91
CFR Cullen/Frost Bankers $1.56
CWT California Water Service $0.41
FSS Federal Signal $0.45
AER AerCap $1.37
COLB Columbia Banking System $0.66
COR CoreSite Realty $0.45
WEX WEX $1.95
TMHC Taylor Morrison Home $0.96
XEL Xcel Energy $0.56
FLEX Flextronics International $0.38
SAIA Saia $2.05
OSTK Overstock $0.67
IDA IdaCorp $1.21
FCN FTI Consulting $1.52
LAWS Lawson Products $0.60
WST West Pharmaceutical Services $1.74
MLM Martin Marietta Materials $3.85
MTSI MACOM Technology Solutions $0.53
LH Laboratory Of America $5.62
EXLS ExlService $1.01
BSAC Banco Santander Chile $0.50
AOS A.O. Smith $0.65
TPX Tempur Sealy International $0.56
HBAN Huntington Bancshares $0.32
WAB Westinghouse Air Brake Technologies $0.96
NOC Northrop Grumman $5.83
MMP Magellan Midstream Partners $1.02
HLT Hilton Worldwide $0.39
KDP Keurig Dr Pepper $0.37
OMCL Omnicell $0.82
BC Brunswick $2.14
MRK Merck & Co $1.40
TRP Transcanada USA $0.77
KIM Kimco Realty $0.12
IP International Paper $1.06
MDC MDC $1.99
PRLB Proto Labs $0.44
SGEN Seattle Genetics -$0.61
CPT Camden Property $0.34
SIMO Silicon Motion Technology $1.25
CUBE CubeSmart $0.21
DLB Dolby Laboratories $0.28
BIO Bio-Rad Laboratories $2.66
CC Chemours Co $0.94
ZEN Zendesk $0.16
FWRD Forward Air $0.97
AJG Arthur J. Gallagher $1.08
SPSC SPS Commerce $0.40
ROG Rogers $1.89
ERIE Erie Indemnity $1.51
CUZ Cousins Properties $0.20
WELL Welltower Inc $0.15
PTCT PTC Therapeutics -$1.81
AUY Yamana Gold USA $0.06
LPLA LPL Financial $1.67
WWE World Wrestling Entertainment $0.25
WRE Washington Real Estate Investment -$0.04
TXRH Texas Roadhouse $0.98
ATR AptarGroup $0.97
GLPI Gaming And Leisure Properties $0.57
OFC Orate Office Properties $0.14
RSG Republic Services $0.95
TEX Terex $0.60
X United States Steel $3.08
LBTYA Liberty Global Class A Ordinary Shares $0.46
KLAC KLA-Tencor $3.99
SWKS Skyworks Solutions $2.14
DXCM Dexcom $0.44
HUBG HUB $0.70
VCYT Veracyte -$0.25
POWI Power Integrations $0.75
LGND Ligand Pharmaceuticals $1.38
FHI Federated Hermes Inc $0.66
FSLR First Solar $0.55
CWST Casella Waste Systems $0.24
DLR Digital Realty $0.24
MTX Minerals Technologies $1.25
VRTX Vertex Pharmaceuticals $2.37
PFPT Proofpoint $0.49
ESS Essex Property $0.88
GILD Gilead Sciences $1.73
WERN Werner $0.87
MMSI Merit Medical Systems $0.45
LBTYK LIBERTY GLOBAL $0.46
AMZN Amazon $12.24
QGEN Qiagen $0.65
EW Edwards Lifesciences $0.55
NRZ New Residential Investment $0.31
MSTR Microstrategy $0.81
SM SM Energy -$0.26
SWN Southwestern Energy $0.21
TMUS T-Mobile Us $0.51
DECK Deckers Outdoor -$0.15
CORT Corcept Therapeutics $0.17
TWOU 2U -$0.16
SBH Sally Beauty $0.62
MPW Medical Properties $0.29
CACC Credit Acceptance $10.36
SJW SJW $0.64
SHEN Shenandoah Telecommunications $0.86
ES Eversource Energy $0.80
KMPR Kemper $1.33
WRI Weingarten Realty Investors $0.10
OPK Opko Health $0.02
SU Suncor Energy USA $0.39
APELY Alps Electric $0.11
ACI AltaGas Canada $0.69
EXPO Exponent $0.42

Friday (July 30)

Ticker Company EPS Forecast
KMTUY Komatsu $0.40
VFC VF $0.11
ABR Arbor Realty $0.42
PEXNY PTT Exploration & Production $0.16
LAZ Lazard $0.89
HRC Hill-Rom $1.35
XOM Exxon Mobil $1.00
COG Cabot Oil Gas $0.29
MFG Mizuho Financial $0.08
GCTAY Siemens Gamesa ADR $0.02
TU Telus USA $0.21
JCI Johnson Controls $0.83
CL Colgate-Palmolive $0.80
BAH Booz Allen Hamilton $0.97
TOTDY Toto $0.25
ASEKY Aisin Seiki Co $1.13
BBVA Banco Bilbaoizcaya Argentaria $0.06
E ENI $0.33
FMS Fresenius Medical Care $0.48
SMFG Sumitomo Mitsui Financial $0.21
SBGSY Schneider Electric SA $0.63
PG Procter & Gamble $1.09
CHD Church Dwight $0.70
ALNPY ANA Holdings ADR -$0.20
CVX Chevron $1.58
BNPQY BNP Paribas ADR $1.07
NMR Nomura $0.17
CHT Chunghwa Telecom $0.34
HUN Huntsman $0.81
LIN Linde PLC $2.55
AON AON $1.85
PNM PNM Resources $0.46
CAT Caterpillar $2.41
CPRI Capri Holdings Ltd $0.79
BLMN Bloomin’ Brands $0.66
CHTR Charter Communications $4.79
DAN Dana $0.50
ITW Illinois Tool Works $2.09
GWW Grainger $4.59
CERN Cerner $0.76
NWL Newell Brands Inc $0.45
POR Portland General Electric $0.37
ENB Enbridge USA $0.45
LYB LyondellBasell Industries $5.30
ABBV AbbVie $3.08
SHLX Shell Midstream Partners $0.35
WPC W. P. Carey $0.56
AVNT Avient Corp $0.81
WY Weyerhaeuser $1.37
IDXX Idexx Laboratories $2.02
BCPC Balchem $0.82
For a look at all of today’s economic events, check out our economic calendar.

Lockheed Martin’s Q1 Earnings to Rise About 4%; Target Price $425

Bethesda, Maryland-based global security and aerospace company Lockheed Martin is expected to report its first-quarter earnings of $6.31 per share on Tuesday, which represents year-over-year growth of about 4% from $6.08 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 5% to around $16.4 billion. It is worth noting that in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 2%.

According to analysts at TREFIS, revenues and earnings to observe 4% and 6% growth in 2021, respectively.

Lockheed Martin shares, which fell about 9% last year, rebounded over 10% so far this year.

Analyst Comments

“We see roughly in line EPS of $6.33 (+4% y/y) on near consensus revenue of $16.45B (+5%). This is in line with weapons outlays (nearly +7% in Jan-Feb), which is typically correlated with sector sales growth, while our Q1 segment margin of 10.9% is slightly below Q1:20’s 11.0%,” noted Cai von Rumohr, equity analyst at Cowen.

“2021 revenue guide is unlikely to change after only 1Q, so the midpoint of $67.8B still may lag Street’s $68.06B. We est. the segment margin of 11.0% in line with the midpoint of guidance. Diluted EPS midpoint of $26.15 lags Street’s $26.34.”

Lockheed Martin Stock Price Forecast

Seven analysts who offered stock ratings for Lockheed Martin in the last three months forecast the average price in 12 months of $425.33 with a high forecast of $445.00 and a low forecast of $394.00.

The average price target represents an 8.56% increase from the last price of $391.81. Of those seven analysts, five rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $445 with a high of $633 under a bull scenario and $310 under the worst-case scenario. The firm gave an “Overweight” rating on the aerospace company’s stock.

“We view Lockheed as one of the most well-positioned companies with leadership positions in hypersonics, directed energy, autonomy, multi-domain operations, and space. Additionally, the company has one of the most well-insulated and visible earnings profiles in the group as a result of the F-35 program that makes up nearly 30% of total company revenues that is paired with multi-decade visibility,” said Kristine Liwag, equity analyst at Morgan Stanley.

“Our top Defense pick is Lockheed and we expect the stock to outperform defense peers due to its defensible portfolio, steady execution, strong free cash flow generation, and underlevered balance sheet.”

Several other analysts have also updated their stock outlook. UBS raised the stock price forecast to $425 from $400. In January, Berenberg lowered the target price to $400 from $425 and JP Morgan cut the price objective to $397 from $410.

Check out FX Empire’s earnings calendar

Stock Pick Update: November 4 – November 10, 2020

In the last five trading days (October 28 – November 3) the broad stock market has extended its short-term downtrend, as it fell below 3,250 mark on Friday. But then on Tuesday, the market has retraced all of its decline ahead of the U.S. Presidential Election. The S&P 500 index set new record high of 3,588.11 on September 2. Then it fell below February 19 high of 3,393.52 again. In late September it set a local low of 3,209.45 before going back above 3,500 mark. On October 12 it reached 3,549.85. So far, it looks like a medium-term consolidation following 63.7% rally from March 23 corona virus low at 2,191.86.

The S&P 500 index has gained 0.80% between October 28 and November 3. In the same period of time our five long and five short stock picks have gained 0.24%. So stock picks were relatively slightly weaker than the broad stock market. Our long stock picks have gained 3.90% . However, short stock picks have resulted in a loss of 3.42%.

There are risks that couldn’t be avoided in trading. Hence the need for proper money management and a relatively diversified stock portfolio. This is especially important if trading on a time basis – without using stop-loss/ profit target levels. We are just buying or selling stocks at open on Wednesday and selling or buying them back at close on the next Tuesday.

If stocks were in a prolonged downtrend, being able to profit anyway, would be extremely valuable. Of course, it’s not the point of our Stock Pick Updates to forecast where the general stock market is likely to move, but rather to provide you with stocks that are likely to generate profits regardless of what the S&P does.

This means that our overall stock-picking performance can be summarized on the chart below. The assumptions are: starting with $100k, no leverage used. The data before Dec 24, 2019 comes from our internal tests and data after that can be verified by individual Stock Pick Updates posted on our website.

Below we include statistics and the details of our three recent updates:

  • November 3, 2020

Long Picks (October 28 open – November 3 close % change): D (+2.09%), FB (-4.84%), WYNN (+5.46%), BKR (+15.24%), ARE (+1.53%)
Short Picks (October 28 open – November 3 close % change): PXD (+1.27%), DRE (+8.66%), ITW (+7.09%), CMS (+0.72%), CMCSA (-0.63%)

Average long result: +3.90%, average short result: -3.42%
Total profit (average): +0.24%

  • October 27, 2020

Long Picks (October 21 open – October 27 close % change): PPL (+1.96%), WDC (-3.40%), WYNN (-0.25%), XOM (-2.06%), LIN (-3.02%)
Short Picks (October 21 open – October 27 close % change): WMB (-1.12%), SHW (-0.23%), TROW (-2.61%), WEC (+1.63%), NVDA (-1.68%)

Average long result: -1.35%, average short result: +0.80%
Total profit (average): -0.27%

  • October 20, 2020

Long Picks (October 14 open – October 20 close % change): CSCO (-1.63%), NI (+2.03%), CMG (+1.38%), XOM (-1.06%), SHW (-3.41%)
Short Picks (October 14 open – October 20 close % change): WMB (+1.33%), APD (-1.83%), JPM (+0.07%), NVDA (-4.51%), WEC (+1.47%)

Average long result: -0.54%, average short result: +0.69%
Total profit (average): +0.08%

Let’s check which stocks could magnify S&P’s gains in case it rallies, and which stocks would be likely to decline the most if S&P plunges. Here are our stock picks for the Wednesday, November 4 – Tuesday, November 10 period.

We will assume the following: the stocks will be bought or sold short on the opening of today’s trading session (November 4) and sold or bought back on the closing of the next Tuesday’s trading session (November 10).

We will provide stock trading ideas based on our in-depth technical and fundamental analysis, but since the main point of this publication is to provide the top 5 long and top 5 short candidates (our opinion, not an investment advice) for this week, we will focus solely on the technicals. The latter are simply more useful in case of short-term trades.

First, we will take a look at the recent performance by sector. It may show us which sector is likely to perform best in the near future and which sector is likely to lag. Then, we will select our buy and sell stock picks.

There are eleven stock market sectors: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Technology, Communications Services, Utilities and Real Estate. They are further divided into industries, but we will just stick with these main sectors of the stock market.

We will analyze them and their relative performance by looking at the Select Sector SPDR ETF’s .

Based on the above, we decided to choose our stock picks for the next week. We will choose our top 3 long and top 3 short candidates using trend-following approach, and top 2 long and top 2 short candidates using contrarian approach:

Trend-following approach:

  • buys: 1 x Utilities, 1 x Materials, 1 x Industrials
  • sells: 1 x Technology, 1 x Consumer Discretionary, 1 x Real Estate

Contrarian approach (betting against the recent trend):

  • buys: 1 x Technology, 1 x Consumer Discretionary
  • sells: 1 x Utilities, 1 x Materials

Trend-following approach

Top 3 Buy Candidates

PEG Public Service Enterprise – Utilities

  • Stock remains above month-long upward trend line – uptrend continuation play
  • The resistance level of $62 and support level of $57

IFF Intl Flavors & Fragrances – Materials

  • Short-term uptrend continuation play and a possible breakout about downward trend line
  • The resistance level of $114
  • The support level remains at $100

LMT Lockheed Martin Corp. – Industrials

  • Stock broke above downward trend line, possible short-term uptrend continuation
  • The resistance level is at $365-375
  • The support level is at $350

Summing up the Utilities, Materials XLB and Industrials sectors were relatively the strongest in the last 30 days. So that part of our ten long and short stock picks is meant to outperform in the coming days if the broad stock market acts similarly as it did before.

We hope you enjoyed reading the above free analysis, and we encourage you to read today’s Stock Pick Update – this analysis’ full version. There, we include the stock market sector analysis for the past month and remaining long and short stock picks for the next week. There’s no risk in subscribing right away, because there’s a 30-day money back guarantee for all our products, so we encourage you to subscribe today .

For a look at all of today’s economic events, check out our economic calendar.

Thank you.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits – Effective Investments through Diligence and Care

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Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Lockheed Martin In Holding Pattern Ahead Of U.S. Election

Lockheed Martin Corp. (LMT) is the world’s largest defense contractor, with the highly-popular but hugely-expensive F-35 fighter and THAAD anti-ballistic weapons system providing the fair share of total annual income. The blue chip manufacturer reported solid Q2 2020 earnings results last week, beating top and ottom line estimates while lowering fiscal year 2020 consensus as a result of supply disruptions, due to the COVID-19 pandemic.

Lockheed Martin Dependent On Military Contracts

The mega-cap depends on massive Congressional budgets to fulfill Pentagon wish lists, as well as lucrative foreign contracts with allied nations that include Israel, Saudi Arabia, and Japan. While Republicans have been recognized as military hawks for decades, defense budgets have rarely been reduced during Democratic administrations, lowering odds the November election will disrupt the nearly-continuous supply of new work orders.

Lockheed Martin named Jim Taiclet as CEO in June, succeeding Marillyn A. Hewson. Taiclet outlined company strengths, stating “I’ve seen first-hand much of the incredible work across this corporation providing the tools for a strong national defense and advancing scientific progress”. He then added a patriotic but self-serving note, remarking “it’s about doing something important for the frontline men and women that have to defend us. They deserve the best equipment, the highest technology, something better than our adversaries are going to have.”

Wall Street And Technical Outlook

Wall Street currently rates the stock as a ‘Moderate Buy’, calculated from 6 ‘Buy’ and 5 ‘Hold’ recommendations. No analysts are recommending that shareholders close out positions and move to the sidelines at this time. Price targets range from a low of $395 to a street-high $475 while shares are now trading $13 under the low target and $41 under the median $424 target. This humble placement bodes well for higher prices in coming months.

Lockheed Martin has been engaged in a strong uptrend since the first quarter of 2013, rallying more than 500% into February’s all-time high at 442. The stock failed a breakout above the 2018 high at 363 in the first quarter swoon but has now remounted that broken level, reinstating the bullish long-term outlook. While the rally could eventually lift well above the 500 level, the U.S. presidential election may limit gains between now and November.