Lockheed Martin is poised for a potential stock rally after securing a 10-year framework agreement with the U.S. Department of Defense for the production of its F-35 Lightning II stealth fighter. Morgan Stanley upgraded the company from equal weight to overweight and increased its price target from $690 to $835, reflecting a projected upside of 38% from the stock's closing price on Friday.
Analyst Kristine Liwag highlighted that this agreement significantly reduces risk for investors, alleviating previous concerns that the F-35 program might be a financial burden on the defense budget.
Additionally, Lockheed's recent third-quarter earnings report exceeded expectations, contributing to a nearly 7% increase in share price on the day of the announcement and a more than 9% rise by the end of the week. The company is also benefiting from partnerships with newer defense technology firms, which could enhance production efficiency and shield it from competition.
Overall, the consensus among analysts is positive, with 13 out of 26 recommending a buy or strong buy on Lockheed Martin's stock, while shares have already increased by 25% in 2026