Why Lockheed Martin Stock Took Off Today
Key Points
Germany may double its order of Lockheed Martin F-35 fighter jets.
Germany may also pull out of the pan-European FCAS fighter jet project.
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Lockheed Martin (NYSE: LMT) stock skipped 2% higher through 1:20 p.m. ET Thursday after Reuters reported that Germany's air force is looking to order as many as three dozen new F-35 stealth fighter jets from the U.S. defense contractor.
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Germany sours on Europe(an fighter jets)
Reuters broke this news last night, reporting that Germany is souring on the idea of building a "Future Combat Air System" sixth-generation fighter jet in cooperation with France and Spain. The FCAS program is said to have encountered difficulties getting off the ground and, in any case, even if all goes well, the FCAS jet probably wouldn't be ready to enter service before 2040 -- or even 2045.
That's far too late to be of use if Germany enters into a military conflict with Russia in the next few years (which is the worry). In contrast, Germany has already ordered 35 F-35 fighters from Lockheed, with the first planes due to arrive this year.
Now Germany may purchase another 35 -- or more -- F-35s as it mulls pulling out of FCAS.
Is Lockheed Martin stock a buy?
With roughly 20 countries worldwide flying it, the F-35 has become the world's most popular fifth-generation stealth fighter. Lockheed Martin is the sole producer of the F-35, and has built more than 1,300 of the stealth fighters to date. What's more, with Lockheed hitting a new record of 191 F-35s produced in 2025, the number of F-35s flying worldwide is growing by nearly 15% per year!
Lockheed's success hasn't gone unnoticed, however. Priced at 30 times earnings, and more than two times annual sales (my preferred valuation for defense stocks remains 1.0x sales), Lockheed stock may be too expensive for my taste.
But Lockheed Martin, the company, is doing just fine.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
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