It's been a little over a month since UBS analyst Gavin Parsons upgraded Lockheed Martin (LMT +3.40%) stock to "buy" with a $674 price target, predicting "26% upside" as sales of missiles, munitions, F-35 stealth fighters, helicopters, and... Trident nuclear missiles (!) drive 9% sales growth for the defense giant over the next few years.
Lockheed stock is up a couple of percentage points since that Sept. 8 upgrade. Today, Lockheed's gaining another 2.5% through 1:10 p.m. ET -- its third straight day of gains.
And once again, UBS is the reason.
Image source: Lockheed Martin.
UBS still loves Lockheed Martin stock
Back in September, Parsons argued that Lockheed Martin's Missiles and Fire Control (MFC) division alone would grow a total of 150% in size over the next five years. In a note covered on StreetInsider.com this morning, the analyst reiterated this prediction, further detailing that he expects sales to grow 20% annually through 2030.
In dollars and cents, he says this works out to sales of PAC-3 Patriot and THAAD air defense missiles and JASSM/LRASM attack missiles, "adding $7bn / $5bn / and $3bn respectively, to topline" revenue. But according to UBS, few investors are expecting such growth -- meaning Lockheed Martin could deliver positive earnings surprises for years.
LMT Lockheed Martin
NYSE · As of 3:34 PM ET 10/16/26
How to value Lockheed Martin stock
Now here's why this is important for investors: Beyond just the revenue growth, you need to realize that MFC is currently Lockheed Martin's most profitable division, delivering 13% operating profit margins on its revenue, versus an overall profitability of 10.7%.
This implies that if Lockheed grows sales 20% annually, its profits could grow even faster -- specifically, faster than the 17% growth the rest of Wall Street predicts.
At a share price below 20 times earnings, Lockheed Martin stock looks like a buy to me.
