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Since Lockheed Martin Corporation (NYSE:LMT) released its earnings in March 2019, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 7.8% in the upcoming year against the past 5-year average growth rate of 3.9%. With trailing-twelve-month net income at current levels of US$5.0b, we should see this rise to US$5.4b in 2020. In this article, I've outlined a few earnings growth rates to give you a sense of the market sentiment for Lockheed Martin in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Lockheed Martin
What can we expect from Lockheed Martin in the longer term?
Longer term expectations from the 18 analysts covering LMT’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$5.0b and the final forecast of US$6.7b by 2022, the annual rate of growth for LMT’s earnings is 8.6%. This leads to an EPS of $27.46 in the final year of projections relative to the current EPS of $17.74. Margins are currently sitting at 9.4%, which is expected to expand to 11% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Lockheed Martin, there are three important factors you should further research:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is Lockheed Martin worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Lockheed Martin is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lockheed Martin? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.