Bethesda, Maryland-based Lockheed Martin Corporation (LMT) is a security and aerospace company that engages in the research, design, development, integration, and sustainment of technology systems, products, and services. With a market cap of $125.5 billion, the company offers defense, space, intelligence, homeland security, and information technology, including cybersecurity products and services. 

Companies worth $10 billion or more are typically considered “large-cap stocks,” and LMT fits this category comfortably, with a market cap well above this threshold. The company distinguishes itself as one of the largest defense contractors in the world and is renowned for its innovative weapon systems, showcasing cutting-edge defense technology for modern warfare and security. 

LMT is down 16% from its 52-week high of $618.95, achieved on Oct. 21. Shares of this aerospace and defense giant have declined 8.4% over the past three months, significantly underperforming the broader Nasdaq Composite’s ($NASX) 9.5% gain during the same time frame.

Moreover, in the longer term, LMT has gained 14.8% on a YTD basis, lagging behind NASX’s 29.3% returns. Shares of LMT are up 15.8% over the past 52 weeks, underperforming NASX’s 35.6% gains over the same time frame.

To confirm its recent bearish trend, LMT has been trading below its 50-day moving average since late October. However, the stock has been trading above its 200-day moving average since late March. 

On Nov. 25, LMT announced that it had secured a contract worth $870 million from the US Department of Defense involving its F-35 fighter jet program. Despite this, shares of LMT dipped nearly 3.8% that day. 

On Oct. 22, shares of LMT plunged 6.1% after its mixed Q3 earnings release. The company’s adjusted EPS climbed 1% year-over-year to $6.84 and outpaced the consensus estimates of $6.47. On the other hand, its revenue of $17.1 billion increased by 1.2% from a year ago but still fell short of Wall Street’s forecasted figure of $17.3 billion. 

The revenue miss can be primarily attributed to a decline in revenues from the company’s core aeronautics and space businesses, mainly fueled by rising costs and delayed deliveries in its F-35 Lightning II fighter jet division. Moreover, LMT’s 5.9% annual decline in net earnings to $1.6 billion and 17.2% year-over-year fall in its cash from operations totaling $2.4 billion might have further dampened investor confidence. 

However, LMT has still managed to outpace its rival, The Boeing Company (BA), which dipped 39.9% on a YTD basis and 33.1% over the past 52 weeks.

Despite LMT’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts covering the stock, and the mean price target of $607.33 suggests a 16.7% premium to its current levels.