Game-Changer Alert: Morgan Stanley Upgrades Top ‘Prime Beneficiary’ Reaping Rewards from Defense Exports!

Lockheed Martin’s shares could see significant upward momentum following an upgrade by Morgan Stanley, which moved its rating from “equal weight” to “overweight” and increased its price target from $525 to $575. This new target indicates a potential upside of over 22% from Tuesday’s closing price. Analyst Kristine Liwag pointed to Lockheed Martin’s substantial international business, which accounts for roughly 27% of sales and 30% of the company’s backlog, as a key growth driver. Liwag highlighted the aerospace giant as a primary beneficiary of anticipated growth in defense exports, emphasizing that despite some hesitancy concerning F-35 commitments from countries like Canada, the fighter jet faces little competition as the world’s most advanced aircraft. According to her, demand for the F-35 is likely to remain robust internationally.

In addition to strong global demand, Liwag noted Lockheed Martin has overcome recent setbacks in its Missiles and Fire Control (MFC) program. These issues, which contributed to over 75% of the charges in the fourth quarter of 2024, now appear to be largely resolved. She also mentioned that Lockheed Martin currently trades at roughly a 10% discount compared to the broader Defense Prime group, presenting an attractive valuation opportunity. The stock’s forward price-to-earnings ratio stands at 16.8, based on data from FactSet.

Despite losing more than 23% over the past half-year, Lockheed Martin shares have outperformed the S&P 500 in 2025, as the stock is down just 3% year to date in contrast to the S&P 500’s 8% drop. Additionally, the stock rose over 5% within the last month, further outpacing the market index. The surge continued premarket on Wednesday, with shares climbing 1.5% following Morgan Stanley’s bullish reassessment.

While there’s evident optimism around Lockheed Martin, analysts are divided. Out of 25 analysts covering the stock, 10 have issued a “strong buy” or “buy” rating, weighed against 14 analysts who maintain a “hold” position, according to LSEG data.

In related news, a significant event for investors is approaching. CNBC Pro is set to host an exclusive, in-person event at the New York Stock Exchange on Thursday, June 12. As a CNBC Pro subscriber, you’ll have the opportunity to attend interactive sessions led by experts including Carter Worth, Dan Niles, and Dan Ives, along with a special edition of Pro Talks featuring Tom Lee. This event offers a valuable chance to gain insights during volatile market conditions and to network with CNBC experts and fellow subscribers. Given the limited availability of tickets, interested subscribers should secure their spots promptly.

For readers keen on understanding market dynamics and investment strategies, this upgrade of Lockheed Martin by Morgan Stanley underscores the growing opportunities within the defense sector, particularly as global demand for advanced defense technology rises. With strategic insights and proactive decision-making, investors may navigate these uncertain markets efficiently.

Original Source: https://www.cnbc.com/2025/04/16/morgan-stanley-upgrades-this-prime-beneficiary-of-defense-exports.html
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Publish Date: 2025-04-16 21:09:00