Shares of Lockheed Martin (LMT 1.05%) fell 14.3% in April while the broad market was soaring, according to data from S&P Global Market Intelligence. Defense stocks are coming back to earth amid falling tensions in the Iran conflict in April, while Lockheed Martin itself posted disappointing first-quarter 2026 earnings due to program delays.
Here's why Lockheed Martin stock was falling last month, and whether defense stock investors should buy the dip today.
NYSE: LMT
Key Data Points
Earnings disappointment, Iran conflict
For the March quarter, Lockheed Martin's sales were flat year over year. However, its earnings per share (EPS) fell to $6.44 compared to $7.28 a year prior due to supply chain issues across some of its fighter jet and classified programs. With some of these systems under fixed-cost contracts with the government, delays can lead to cost overruns and margin compression, which Wall Street does not like. This is the main reason why the stock fell in April.
What's more, the Iran conflict began to ease in April, causing most defense stocks to fall. However, one may argue that Lockheed Martin is well-positioned to benefit from the demands of modern warfare if it can get its supply chain in order. The F-35 is the premier fighter jet used by the United States and its allies, while its missile interceptors have been heavily deployed and are the subject of calls for increased production. Its space segment is set to see increased spending from both military and scientific applications.
Image source: Getty Images.
Time to buy the dip?
As of this writing on May 4th, 2026, Lockheed Martin stock is down 23% from all-time highs. It has a current price-to-earnings ratio (P/E) of 25, although its earnings over the last twelve months are slightly depressed due to supply chain concerns.
If Lockheed Martin can turnaround its supply chain issues, the stock looks promising here. The United States is planning to greatly increase its defense budget, while conflicts around the world are calling for increased spending on fighter jets and missile defense systems in Europe, the Middle East, and East Asia. This should lead to steady revenue growth for Lockheed Martin in the years ahead.
Historically, Lockheed Martin has been a strong dividend growth stock, driven by its consistent cash flow and share buyback program. Its dividend currently yields 2.59%, and its dividend per share has grown by 109% in the last 10 years. If the same pace continues over the next 10 years, Lockheed Martin is a good stock to buy the dip on today.
