Lockheed Martin (NYSE:LMT | LMT Price Prediction) reported Q2 EPS of $7.94 versus $7.199 expected, revenue of $20.06 billion, and a record $230.42 billion backlog.
Shares ripped 10.54% in a single session and are up 18.95% year to date. Can LMT push through to $700 per share by 2027?
What Was Holding Lockheed Back
Coming into 2026, LMT was the sick man of large-cap defense. Q1 was a miss, EPS $6.44 versus $6.70 expected, and the stock dropped 4.62% on the report. F-35 deliveries collapsed to 19 from 50 a year earlier, and unfavorable adjustments on Heavy Lift ($65 million) and Seahawk ($50 million) reinforced fixed-price program risk eating margins.
Peers ran ahead. General Dynamics hit an all-time high of $381.18 while LMT sat roughly 12% below its 52-week high of $687.50. Analysts at TD Cowen and Jefferies flagged margin pressure and a sector that had gone “out of favor.” With a beta of just 0.113, LMT grinds rather than bounces hard, capping enthusiasm.
Wall Street Sees 6.7% Upside. I Think That’s Too Cautious
The Street consensus target sits at $606.68, with 2 Strong Buys, 4 Buys, 14 Holds, and 1 Sell. Our base case model lands at $619.24, an 8.91% upside, with a bull case of $660.34 and confidence rated 0.9, or high.
Both figures anchor to 29% bullish analyst sentiment and 67% neutral. Morgan Stanley raised the firm’s price target on Lockheed Martin to $690 from $653 and keeps an Equal Weight rating on the shares
Management raised full-year EPS guidance to $29.95 to $30.65 and free cash flow to $7 billion to $7.2 billion. Fourteen Holds today is a stale rating.
The Path to $700 Per Share
Reaching $700 from today’s price of $568.59 would require a gain of 23.1%. With forward EPS of $31.39, a price of $700 implies a forward P/E of 22x. Our base case of $619.24 already implies 21x means the bold target requires only 1.3x of additional multiple expansion.
That is achievable if guidance keeps moving up. CEO Jim Taiclet said the quarter reflected “a $35 billion multi-year contract with the Missile Defense Agency for THAAD” and raised guidance to “accelerated year-over-year sales growth of approximately 8%, driving 28% higher segment operating profit.”
New wins keep landing: a 12-year logistics deal with U.S. Special Operations Command worth up to $10.5 billion and a $1.6 billion F-35 spares order for the U.S. Navy. The primary risk is renewed fixed-price program charges that reset earnings lower.
Where Lockheed Trades Today Versus Its Earnings Power
At $568.59 against forward EPS of $31.39, LMT trades at roughly 18x forward earnings. For a business compounding backlog to $230 billion with $2.9 billion of quarterly free cash flow, that is cheap.
Shares sit between the 52-week low of $401.69 and high of $687.50, and the stock has returned 189.98% over ten years. The valuation reset from the Q1 miss has largely been erased, but the multiple has not caught up to the new earnings power the raised guidance implies.
Is $700 Realistic?
$700 by 2027 requires a 23.1% gain and about 1.3x of multiple expansion on top of our base case.
Three things need to go right: guidance drifts higher on THAAD, PAC-3, and Precision Strike Missile ramps; F-35 deliveries stabilize and Aeronautics stops absorbing loss adjustments; the pending Ultra Maritime acquisition closes cleanly. A congressional continuing resolution delaying procurement funding would derail it fastest. We’ve outlined the blueprint for how Lockheed Martin could reach $700 in 2027.
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