Lockheed Martin Price Target Slashed to $571 by Citi: Is the Defense Trade Stuck in Neutral?

Citi lowered its price target on Lockheed Martin (NYSE:LMT | LMT Price Prediction) to $571 from $675, while maintaining a Neutral rating. The price target cut lands as LMT stock trades at $518.41, well below the firm’s revised mark.

For prudent investors, the takeaway on LMT stock is that the defense trade may stay range-bound until the macro backdrop clears. Geopolitical noise, budget continuing-resolution risk, and program-specific scrutiny are weighing on near-term sentiment, even with global defense demand intact.

The Analyst’s Case

Citi refreshed its models across the aerospace and defense sector and laid out a clear sequencing call: aerospace rallies first, defense follows. For Lockheed Martin, the firm doesn’t expect an “immediate V-shaped rally” without a resolution to the Middle East conflict, even though it sees buying opportunities after the recent selloffs.

That framework explains why Lockheed Martin’s price target was trimmed despite a constructive long-term setup. Geopolitical noise, budget continuing-resolution risk, and program-specific scrutiny are muting near-term multiples, even with global defense demand intact.

Company Snapshot

Lockheed Martin carries a market cap near $118.97 billion and operates across Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. Q1 2026 revenue rose just 0.3% year over year to $18.02 billion, and EPS of $6.44 missed the $6.73 consensus.

Lockheed Martin’s margins compressed as segment operating margin slipped from 12% to 10%, weighed down by a $125 million unfavorable F-16 adjustment and pressure on C-130, CH-53K, and Seahawk programs. Yet, management reaffirmed full-year sales guidance of $77.5 billion to $80 billion against a record $194 billion backlog.

Why the Move Matters Now

LMT shares are down 12% over the past month, and the stock trades roughly 25% below its 52-week high. Citi isn’t alone: Bernstein cut its target to $614 from $661 and Jefferies trimmed to $595 from $640 in recent sessions.

The valuation now reflects this reset. Lockheed Martin trades at a P/E ratio of 25x and 17x forward earnings, with a 3% dividend yield backed by 23 consecutive years of dividend increases. That’s a defensive income profile inside a stock that’s lost momentum.

What It Means for Your Portfolio

The bull case for Lockheed Martin stock remains intact: durable F-35 demand, hypersonics and missile orders, the Australia nuclear submarine combat-system selection, and a $407.16 million Aegis contract modification. Global defense budgets continue to expand.

The bear case is what Citi flagged: margin volatility, fixed-price program risk, and the “aerospace first” thesis that leaves defense names lagging. LMT shareholders comfortable with that wait can collect the dividend; those needing near-term performance may prefer smaller positions until Citi’s sequencing plays out.