Trump Stocks to Watch: Lockheed Martin (LMT)
YTD Gains: 7.6%
52-Week Performance: 24.9%
Price Target: $282.68
Of course, Lockheed Martin Corporation (NYSE:LMT) will benefit from President Trump’s massive defense spending increase. While high-profile weapons like the F-35 Fighter gets plenty of press, the world’s largest defense contractor has its fingers in many lucrative pies, such as aircraft control and defense electronics like the Aegis Combat Systems that are an integral part of modern navy ships. These electronics programs are highly lucrative.
On the other hand the headline risk for investors is something to worry about, especially given President Trump’s zeal to negotiate deals on defense contracts.
The Pentagon has long been critical of LMT’s management of the F-35 which, at $400 billion, is the most expensive weapons systems in history. Its top weapons systems evaluator released a highly critical report in January and raised questions whether it will be combat ready in 2020.
Let’s not forget LMT’s recent admission that it found a “material weakness” in the Sikorsky helicopter company it acquired less than a year ago from United Technologies Corporation (NYSE:UTX) and its disappointing guidance for 2017.
Verdict: Take a pass