Please ensure Javascript is enabled for purposes of website accessibility

Why Did Lockheed Martin Stock Drop 6% This Morning?

By Rich Smith - Updated Feb 28, 2020 at 11:57AM

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

There's really only one possible answer.

What happened

Shares of Lockheed Martin (LMT -0.34%) stock dropped nearly 6% in early Friday trading, and remain down 4.4% here at 11:30 a.m. EST. Unlike with LockMart's other big drop this week, though, there's no obvious Lockheed Martin-specific reason for the stock to be down.

Actually, the opposite.

Lockheed Martin GMLRS rocket system firing a rocket.

Image source: Lockheed Martin.

So what

Fact is, the only real news involving Lockheed Martin over the past 24 hours has been good news. Yesterday, according to the Pentagon's daily digest of defense contracts awarded, Lockheed Martin picked up a $1.14 billion order to sell guided multiple launch rocket systems to the U.S. Army.

Now admittedly, for a company the size of LockMart -- $59.8 billion in annual sales -- even a $1.14 billion contract probably isn't enough to move the needle appreciably higher. It's not even 2% of annual revenues, and this particular contract will actually be fulfilled over the course of more than two years.  

That being said, small relative to Lockheed Martin's size though it might be, the contract is good news, not bad. It's certainly not a reason for the stock to go down 4.4%.

Now what

So what is the reason Lockheed Martin stock is dropping today?

As Arthur Conan Doyle once taught us: "Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth." And the simple truth here is that Lockheed Martin stock is dropping today for the same reason that every other stock on the planet seems to be dropping:


Granted, it may not be logical to sell off shares of a defense contractor because some weird virus out of China is making folks nervous about taking a vacation cruise. But the prospect of illness makes people scared, and scared people sometimes do irrational things.

Even things like selling Lockheed Martin stock on a good news day.

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
$424.15 (-0.34%) $-1.47

*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 service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

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.