Boeing Contracts Surge While Lockheed Martin Faces Drop

Boeing saw a 3.1% stock increase after securing a major defense contract, while Lockheed Martin faced a 5.8% decline. The contract win implies potential revenue stability for Boeing and growth in its backlog.

Date: 26-03-2025

AI Rating: 6

Boeing's Turnaround Potential

Boeing's ability to secure a defense contract signifies a positive development that could enhance future revenue growth. With Boeing potentially reaching positive free cash flow (FCF) by the latter half of 2025 and a substantial backlog of $521 billion, there is promise for EPS recovery starting as early as 2026, albeit amid ongoing operational challenges.

Lockheed Martin's Stable, Yet Concerning Performance

Conversely, Lockheed Martin remains a steady performer with a strong dividend history. Despite consistent profitability and dividend growth, it is currently facing stagnant EPS growth forecasted at $27 to $27.30 compared to previous years. The recent loss of a critical contract to Boeing could also affect investor sentiment, leading to a drop in its stock price.

Investment Considerations

Investors must weigh Boeing's speculative upside potential against Lockheed's stable income and lower growth estimates. While Boeing's turnaround could present higher risk and reward if it capitalizes on its backlog, Lockheed offers more predictable returns amidst economic swings. The reports indicate that Boeing currently has greater execution risks due to its quality control issues, while Lockheed's solid dividend yield could appeal to risk-averse investors.

Overall, Boeing's future success is intertwined with resolving its operational issues, while Lockheed must strive for consistent growth to maintain investor confidence.

Stocks: BA LMT