Al Root
Shares of defense contractor Lockheed Martin are running a covert op.
The stock was at $483.46, up 0.7%, in afternoon trading Monday, while the S&P 500 and Dow Jones Industrial Average were down 0.1% and 0.2%, respectively.
Closing in the green will make it 10 consecutive gains in a row. It's the longest winning streak since 2022, according to Dow Jones Market Data. The rally hasn't made much noise. There have been a series of relatively small gains, with shares up just 10% in the recent run.
There isn't a clear answer why. There haven't been any new Buy ratings from Wall Street analysts. In fact, there was one new Hold rating, from Citi analyst John Godyn, who launched coverage on Dec. 11.
"Unfortunately, [Lockheed is] still struggling more than peers with charges and supply chain issues," Godyn wrote. Losses on classified programs have built up, and investors have been worried the company is too reliant on the very successful F-35, which accounts for roughly 25% of total revenue.
Lockheed, however, still benefits from higher global defense spending and steady free cash flow, Godyn added.
Lockheed has had a tough year. Coming into Monday trading, shares were down about 1% year to date. The iShares Aerospace & Defense ETF was up 44%.
Declines left Lockheed stock trading for less than 17 times earnings expected over the next 12 months, down from almost 18 times earnings a year ago. Over the same span, shares of Northrop Grumman have gone from trading for about 17 times earnings to 20 times earnings.
That might be the reason for the rally. The stock has become cheap enough for investors to take a look at it heading into 2026.
Shares also dropped 7% in November. The recent rally still hasn't put the stock above October highs. Shares were weak after the company reported better-than-expected third-quarter earnings in late October.
Maybe investors finally concluded that the quarter wasn't that bad.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
December 15, 2025 16:00 ET (21:00 GMT)
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