What Happened?
Shares of security and Aerospace company Lockheed Martin (NYSE: LMT) jumped 5.9% in the afternoon session after the company reported strong fourth-quarter 2025 results and provided an optimistic financial forecast for 2026 that surpassed Wall Street's expectations.
Lockheed Martin's fourth-quarter sales for 2025 climbed 9.1% year-on-year to $20.32 billion, beating analyst estimates. The company's profit of $5.80 per share also came in slightly ahead of consensus. Looking ahead, the defense contractor's 2026 forecast for both revenue and profit was above expectations. The company also pointed to a backlog of $193.6 billion, up 10% from the previous year, indicating robust future demand for its military technologies.
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What Is The Market Telling Us
Lockheed Martin’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 4.2% on the news that President Trump proposed a significantly higher U.S. defense budget of $1.5 trillion for fiscal 2027.
This figure was well above prior defense spending expectations and represented a potential 50% increase from the previously planned $1 trillion. The news triggered a broader rally across defense stocks, reversing sharp losses from the previous day when the administration had threatened to restrict dividends and stock buybacks at defense contractors. The proposed surge in spending caused investors to rush back into the sector, with Lockheed Martin recovering all of its recent losses. Other defense companies, including Northrop Grumman and L3Harris Technologies, also saw their stocks climb on the news.
Lockheed Martin is up 26.8% since the beginning of the year, and at $630.19 per share, has set a new 52-week high. Investors who bought $1,000 worth of Lockheed Martin’s shares 5 years ago would now be looking at an investment worth $1,958.
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