LMT's Rotary and Mission Systems Sales to Rise on Key Defense Deals

Lockheed Martin Corporation LMT is a prominent forerunner in the global defense space, especially in the United States, where it is the largest defense contractor. With its Rotary and Mission Systems (RMS) business segment, LMT plays a key role in a wide array of defense operations, including sea and-land-based missile defense, offering aerial defense support through the production of combat-proven helicopters, command and control mission solutions, radars, cyber solutions and a few more.

Thanks to LMT’s experience of delivering cutting-edge products to the defense market, it enjoys a solid inflow of contracts for its combat-proven products under the RMS unit like Black Hawk and CH-53K helicopter, Aegis Combat Systems as well as Littoral Combat Ships (LCS). This, in turn, bolsters this unit’s revenue growth. The RMS unit reported a year-over-year increase of 5.9% in sales in Q1 2025, 6% in Q3 2024, 16.7% in Q2 2024 and 16.5% in Q1 2024.

The unit’s recently secured several defense contracts should continue to boost its performance in the days ahead. In June, the Swedish Defence Materiel Administration selected Lockheed Martin’s TPY-4 next-generation ground-based air surveillance radar to enhance the country’s long-range surveillance capabilities, making Sweden the third nation to adopt this advanced fifth-generation radar system. Additionally, the company was awarded a $25 million contract to provide engineering services for the Sentinel A4 radar system.

Other Defense Contractors Riding on Solid Contract Flows

As nations worldwide race to modernize their defense systems, prominent U.S.-based defense contractors like Northrop Grumman NOC and RTX Corporation RTX are also securing more and more contracts for their combat-proven products, thereby ensuring a steady revenue stream for themselves. In June 2025, RTX won a $1.10 billion contract modification for the production and delivery of AIM-9X Lot 25 missiles. Earlier, in May, RTX secured a $1 billion contract to supply up to 55 Standard Missile-3 (SM-3) missiles.

On the other hand, Northrop clinched a $267.2 million contract in March to manufacture and deliver two MQ-4C Triton unmanned air systems and provide the U.S. Navy with a main operating base, along with associated support, related technical and administrative data services. The company clinched a $481.3 million contract in January for providing updates and improvements to the Integrated Air and Missile Defense Battle Command System's software.

LMT’s Price Performance, Valuation and Estimates

Shares of LMT have gained 3% in the past year compared with the industry’s 13.7% growth.

The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.98X compared with its industry’s average of 26.81X.

The Zacks Consensus Estimate for LMT’s 2025 and 2026 earnings has improved over the past 60 days. However, the same for the second and the quarters of 2025 has gone south.

LMT stock 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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