Will Trump's New Executive Order Fast-Track Lockheed's Space Ambitions?

On Aug. 13, U.S. President Donald Trump signed a new executive order, aimed at dramatically accelerating the U.S. commercial space industry by reducing environmental review timelines, streamlining launch and spaceport permits, and expediting approvals for novel missions to enhance national and economic security. This regulatory push should act as a major growth catalyst for defense titan, Lockheed Martin Corp. (LMT), which has been at the forefront of the space industry for more than half a century now.

Notably, Lockheed is a prime contractor for NASA's deep-space Orion spacecraft and builds key satellites for national security. LMT’s most direct benefit comes through its joint venture with Boeing, United Launch Alliance (“ULA”), which is a major player in launching crucial government payloads.

In particular, the order's mandate to expedite environmental reviews at launch sites and the push to reform safety rules for vehicles with advanced flight termination systems can be projected to expedite ULA's Vulcan Centaur rocket launch with less delay and cost.

As this executive order slashes regulatory delays and costs, Lockheed's strategy to commercialize Orion through reusability and flexible missions should prove beneficial. By streamlining launch cadence and approvals, the order directly supports Lockheed's push to improve cost-effectiveness and meet NASA's evolving space exploration needs more competitively.

Other Stocks to Benefit

LMT apart, stocks like Boeing (BA) and L3Harris Technologies (LHX) that are deeply involved in space missions should also benefit from the aforementioned executive order, which pushes to substantially increase commercial space launch cadence.

Notably, Boeing is part of NASA’s Space Launch System (“SLS”), the only proven deep-space optimized, super-heavy lift rocket built to carry astronauts and cargo farther and faster than any rocket in history. BA is the prime contractor for the SLS program’s core stage, upper stage and avionics systems.

On the other hand, L3Harris is involved in the Artemis II mission through its Aerojet Rocketdyne business unit, which provides the RS-25 engines that power the SLS core stage. The company supported more than 2,100 space launches that provided critical intelligence to the United States.

The Zacks Rundown for LMT

Shares of LMT have lost 9% in the year-to-date period against the industry’s 26.9% growth.

The company’s shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.26X compared with its industry’s average of 27.54X.

The Zacks Consensus Estimate for LMT’s near-term earnings has moved south in the past 60 days.

LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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