Biden’s withdrawal from 2024 presidential race: What it means for Lockheed Martin
In a significant political development, President Joe Biden’s resignation from the 2024 presidential race has spurred discussions about its potential impact on major defense contractors like Lockheed Martin Corp (NYSE: LMT).
Despite the political upheaval, Lockheed Martin remains steadfast in its mission, emphasizing that its strategic objectives will persist irrespective of electoral outcomes.
Lockheed Martin’s Chief Operating Officer, Frank St. John, assured stakeholders that the company will maintain its focus on delivering effective deterrence capabilities regardless of the political climate.
In an interview with CNBC, St. John highlighted the company’s long-standing commitment to its mission across different administrations.
“Our mission has always been to provide effective deterrence capability, and that will continue,” St. John said.
Despite the changing political landscape, including the Democratic shift towards Kamala Harris as the potential presidential candidate, Lockheed Martin’s operations and goals remain consistent.
Recent developments boosting Lockheed Martin
Recent geopolitical events have been favorable for Lockheed Martin. The ongoing conflict in Ukraine has increased demand for advanced defense systems.
NATO members are transferring Lockheed Martin’s F-16 fighter jets to Ukraine, and the company has recently started delivering its TR-3 configured F-35s.
These developments are expected to drive revenue growth and bolster Lockheed Martin’s financial outlook.
On CNBC’s “Squawk Box,” St. John acknowledged challenges such as inflation and labor turnover but emphasized the company’s commitment to strengthening the defense industrial base.
Despite these headwinds, Lockheed Martin’s stock has seen a modest increase of 4% since the beginning of 2024.
Earnings report and market outlook
Lockheed Martin is set to release its second-quarter earnings report on Tuesday, July 23rd. Analysts expect the company to report earnings of $6.45 per share (adjusted) on revenues of $17.01 billion.
This projected revenue represents a 1.9% growth compared to the same quarter last year, which saw an 8.1% increase. This contrasts with the 10.1% revenue growth recorded by its peer, Hexcel, for the same period.
Despite strong demand driven by ongoing geopolitical tensions, Lockheed Martin is anticipated to report results in line with Street estimates.
Last month, Wells Fargo reiterated its “equal weight” rating on Lockheed Martin, with a price target of $480. Currently, the stock trades slightly over 1% below this target. Our market analyst Crispus Nyaga, however, is bullish on Lockheed Martin stock.
While President Biden’s withdrawal from the presidential race has stirred political conversations, it is unlikely to disrupt Lockheed Martin’s strategic objectives.
The company’s consistent mission, coupled with recent favorable developments and robust defense demand, positions it well for continued growth.
As Lockheed Martin prepares to report its earnings, investors will be keenly watching to gauge the company’s performance and future prospects amidst the evolving political and economic landscape.
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