Please ensure Javascript is enabled for purposes of website accessibility

Lockheed Martin Stock Drops 4.5% Tuesday

By Rich Smith - Feb 25, 2020 at 5:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's not just because of the coronavirus.

What happened

Shares of Lockheed Martin (LMT 2.05%) dropped 4.5% in Tuesday trading. While it's possible (even likely) that part of the drop was tied to general malaise in the markets, it's also possible there's something a bit more specific going on here.

Lockheed Martin F-35 fighter jet

A Lockheed Martin F-35 fighter jet. Image source: Getty Images.

So what

For the better part of a decade, Canada has been negotiating with a number of defense companies -- Lockheed, Boeing (BA 5.64%), and Airbus (EADSY 2.96%) among them -- to buy a new kind of plane to replace its obsolete fleet of Boeing CF-18 fighter jets.

Depending on when you checked in on the story, either Boeing was winning the competition, or Lockheed and its F-35 stealth fighter were. Today, though, it appears that both companies are in something of a losing position, as Reuters reports that Canada may delay its already long-delayed decision by another three months.  

Supposedly, Canada finally was going to accept preliminary proposals from the bidders (which by now have grown to include Saab, but shrunk to exclude Airbus) by the end of March. But according to Reuters, Prime Minister Justin Trudeau has now postponed the bidding by a further three months "to give bidders more time to address security questions."

Now what

Supposedly, this delay was made at the request of industry, and some seem to think the move was calculated to actually help Lockheed's bid in some way. You'd think that would make Lockheed investors happy if it were true. But Reuters quoted Canadian House of Commons member James Bezan as placing the blame squarely on "Liberal dithering and delaying because of Trudeau's weak leadership."

Which sounds like this is something Lockheed would not be happy with.

In any case, Lockheed shareholders didn't seem to like the news, and the stock is down today -- partly because of the coronavirus, but also partly not.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$419.04 (2.05%) $8.42
The Boeing Company Stock Quote
The Boeing Company
BA
$141.53 (5.64%) $7.56
Airbus Stock Quote
Airbus
EADSY
$24.64 (2.96%) $0.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.