| 2020 | 2021 | 2022 | 2023 (projected) | Consolidated Income | 6.83 B | 6.32 B | 5.73 B | 5.66 B | Direct Expenses | 56.74 B | 57.98 B | 57.7 B | 50.07 B |
Will Lockheed Martin (USA Stocks:LMT) low risk outlook last untill August?
 | By Aina Ster | Macroaxis Story |
Lockheed Martin holds approximately $2.55 billion in cash, with a positive cash flow from operations of $7.8 billion. This results in a cash-per-share (CPS) ratio of 9.27.
Progressive assessment
Lockheed Martin (LMT) has been a stable player in the Aerospace & Defense industry, with a low mean deviation of 0.80 and a standard deviation of 1.03, indicating a low-risk outlook. However, the company's negative Jensen Alpha of -0.08 and Treynor Ratio of -0.07 suggest underperformance when adjusting for risk. The company's market risk adjusted performance stands at -0.06, further emphasizing the low return on risk. Despite the negative risk-adjusted performance indicators, Lockheed Martin's stock has shown a positive price change of 5.66 and a potential upside of 1.67. The stock opened at $464.31 and reached a high price of $473.99, indicating a potential for growth. However, investors should be cautious of the maximum drawdown of 5.34, which represents the highest loss from a peak to a trough of a portfolio, indicating potential risk. In conclusion, while Lockheed Martin's low-risk outlook is likely to sustain through August, investors should consider the company's underperformance when adjusted for risk. The potential for growth and the low volatility of the stock make it a viable investment, but the risk factors should not be overlooked.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Raphi Shpitalnik
As we move into August, investors are keeping a close eye on Lockheed Martin (NYSE: LMT), a key player in the Industrials sector, specifically within the Aerospace & Defense service category. Despite the stock's low-risk outlook, there are several factors that could influence its performance. Currently, the stock is trading at a market value of $469.97, which is slightly below its naive expected forecast value of $471.64. However, the stock's real value is estimated to be lower at $438.07. The analyst overall consensus is a 'Hold', with 15 estimates made, including 4 strong buys, 9 holds, and 2 strong sells. The analyst target price estimated value stands at $495.47, with a possible upside price of $472.65 and a downside price of $470.64. The range of analyst estimated target prices is wide, from a low of $332 to a high of $579. As the fiscal year end in December approaches, it remains to be seen whether Lockheed Martin's low-risk outlook will sustain. Lockheed Martin is projected to generate negative returns, assuming a volatility of 1.0032% on the return distribution over a 60-day investment horizon. As many traditional traders are steering clear of the aerospace and defense sector, it is prudent to delve deeper into Lockheed Martin and attempt to comprehend its current volatility patterns. We will explore the likelihood of Lockheed Martin's current volatility persisting through August.Volatility is a rate at which the price of Lockheed Martin or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Lockheed Martin may increase or decrease. In other words, similar to Lockheed's beta indicator, it measures the risk of Lockheed Martin and helps estimate the fluctuations that may happen in a short period of time. So if prices of Lockheed Martin fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Lockheed Martin's Liquidity
Lockheed Martin financial leverage refers to using borrowed capital as a funding source to finance Lockheed Martin ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Lockheed Martin financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Lockheed Martin's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Lockheed Martin's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Lockheed Martin's total debt and its cash.
Lockheed Martin Gross Profit
Lockheed Martin Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Lockheed Martin previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Lockheed Martin Gross Profit growth over the last 10 years. Please check Lockheed Martin's gross profit and other fundamental indicators for more details.
Lockheed Martin Volatility Drivers
Lockheed Martin unsystematic risk is unique to Lockheed Martin and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Lockheed Martin you can also buy Northrop Grumman. You can also mitigate this risk by investing in the industrials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Lockheed Martin important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Lockheed Martin income statement and balance sheet. Here are more details about Lockheed volatility.Click cells to compare fundamentals
Breaking it down
The company reported the last year's revenue of 65.98 B. Total Income to common stockholders was 5.73 B with profit before taxes, overhead, and interest of 8.39 B.
Lockheed Martin (USA Stocks: LMT) has been showing a low-risk outlook, with a Beta of 0.65, indicating less volatility compared to the market. The company's Variance and Standard Deviation stand at 1.07 and 1.03 respectively, further reinforcing its low-risk status. However, the company's Market Risk Adjusted Performance is at -0.06 and its Jensen Alpha is -0.08, suggesting a potential underperformance when compared to the expected return of a risk-free asset. The company's financial health appears solid, with Cash and Equivalents amounting to $2.55B and a healthy Current Ratio of 1.28X, indicating its ability to meet short-term obligations. Lockheed Martin's EBITDA stands at a robust $8.71B, with a Net Income of $5.73B.The company's Price to Earnings ratio is 19.51X, suggesting that the stock may be fairly valued. Despite the low-risk outlook, the Maximum Drawdown of 5.34 indicates potential losses that investors may have to bear. Additionally, the company's Value At Risk is -1.64, suggesting a potential downside. With the company's Shares Owned by Institutions at 78.05%, institutional investors.seem to have a high level of confidence in the company. In conclusion, while Lockheed Martin's low-risk outlook seems promising, investors should consider the potential downside and underperformance risks. The company's financial health and institutional ownership are positive indicators, but the sustainability of the low-risk outlook through August remains to be seen. .
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