Lockheed Martin faces risks from U.S. government funding uncertainty, budget cuts, continuing resolutions, and changing priorities. Supply chain disruptions, supplier shortages, and inflation increase costs and decrease operational efficiency. Contractual risks include potential losses on fixed-price contracts, performance issues on programs like the F-35, and the outcome of legal proceedings, including environmental remediation efforts. Geopolitical risks, including international conflicts and sanctions, also pose a threat.
Financial Upside
Lockheed Martin anticipates continued demand for its products and services due to global security concerns. The F-35 program, with ongoing production and international interest, presents a significant revenue stream. Favorable contract adjustments and higher volume on certain programs, like GMLRS and LRASM, contribute to potential profit increases. The company is also pursuing new business opportunities and returning cash to shareholders through dividends and share repurchases.
