Lockheed Martin Just Scored a $4.7 Billion Army Contract. Does That Make LMT Stock a Buy?

Lockheed Martin (LMT) shares remain in focus after the defense giant announced a $4.7 billion Army contract to accelerate the production of PAC-3 MSE interceptors. The news arrived shortly after hopes of a truce between the U.S. and Iran made LMT slip below its key moving averages (20-day and 50-day), signaling bears are now taking control across multiple timeframes. 

That said, Lockheed stock has been a strong performer in 2026, currently up more than 20% versus the start of this year. 

Significance of the Army Contract for Lockheed Martin Stock

The announced Army contract is meaningfully positive for LMT shares as it underscores the shift from “just in time” to “just in case” defense procurement. 

As global stockpiles deplete due to active conflicts and heightened deterrence efforts, this new deal provides Lockheed Martin with long-term revenue visibility. 

By securing funds to expand production lines today, the NYSE-listed firm ensures it remains a key beneficiary of a multi-year rearmament cycle, effectively insulating its MFC segment from broader economic volatility. 

Note that Lockheed also pays a healthy dividend yield of 2.25%, making it all the more attractive as a long-term holding.  

LMT Shares Are Trading at a Discount in 2026

Financially, Lockheed Martin entered 2026 with a record $194 billion backlog, providing a safety net that not a lot of its industrial peers can match. 

While a dip below MAs might worry technical traders, it’s actually created a more attractive entry point for fundamental investors, given that at 21x forward earnings, it’s trading at a discount to peers RTX Corp (RTX) and Northrup Grumman (NOC). 

This is why Jefferies raised its price target on LMT this week to $640, adding management’s recent guidance for a 25% boost to missile division profit signals the stock may be undervalued at current levels. 

Note that Lockheed shares have a history of closing both April and May in the green, a seasonal pattern that makes them even more compelling in the near term. 

How Wall Street Recommends Playing Lockheed Martin

Interestingly, Jefferies is actually among the more conservative Wall Street firms on LMT stock. 

The consensus rating on Lockheed Martin currently sits at a “Moderate Buy," with the mean price target of nearly $667 indicating potential upside of another 9% from here.