Lockheed Martin Corporation (LMT) Stock Valuation — PE Analysis
Aerospace & Defense · NYSE
Current Price
$632.22
PE Ratio (TTM)
22.4x
Intrinsic Value
$672.5
+6.0% margin of safety
COMPETITIVE MOAT
↑Deep Government Relationships
Lockheed Martin benefits from decades-long, entrenched relationships with defense departments globally. These partnerships foster trust and create significant barriers to entry for competitors.
↑Technological Expertise & R&D
The company possesses highly specialized technological capabilities and invests heavily in research and development. This allows them to maintain a leading edge in complex defense systems.
↑Scale and Production Capacity
LMT's massive scale and established production infrastructure are critical for fulfilling large, complex defense contracts. This capacity is difficult and time-consuming for rivals to replicate.
INVESTMENT RISKS
↓Geopolitical Instability and Demand Fluctuations
While current conflicts drive demand, shifts in global politics or peace initiatives could significantly alter defense spending and LMT's order book.
↓Program Delays and Cost Overruns
Large, complex defense projects are inherently prone to delays and budget overruns, which can impact profitability and reputation.
↓Regulatory and Political Scrutiny
As a major defense contractor, LMT faces constant scrutiny from governments regarding contracts, pricing, and ethical practices.
Base case
LMT base case PE valuation
At a current price of $632.22, the base case PE valuation puts LMT fair value near $672.5 per share. That figure assumes 6.7% yearly earnings growth, a target PE multiple of 22.05x, and a 10% discount rate.
Intrinsic Value
$672.5
Margin of safety
+6.0%
Expected annual return
+1.2%
Base case assumptions: 6.7% annual earnings growth, 22.05x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LMT PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Lockheed Martin Corporation respond.
Open PE Calculator for LMTCompany Overview
Lockheed Martin Corporation stands as a prominent global security and aerospace enterprise, specializing in the comprehensive lifecycle of advanced technological systems. Its expertise spans the research, design, development, manufacturing, integration, and ongoing sustainment of cutting-edge products and services across the world. The company's diverse operations are structured into four key segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The Aeronautics division is responsible for creating and producing leading-edge combat and air mobility aircraft, alongside unmanned aerial vehicles and their related innovations. The Missiles and Fire Control segment delivers sophisticated air and missile defense systems; tactical and precision air-to-ground weapon systems; comprehensive logistics; advanced fire control; mission operations, readiness, engineering support, and integration services; both crewed and uncrewed ground vehicles; and energy management solutions. Within the Rotary and Mission Systems segment, the portfolio includes military and commercial helicopters, naval surface ships, land and sea-based missile defense systems, advanced radar technologies, maritime and airborne mission and combat systems, intricate command and control solutions, cybersecurity services, and simulation and training platforms. The Space division focuses on satellites, space transportation systems, strategic, advanced strike, and defensive missile systems, as well as classified systems and services vital for national security. This segment further enhances situational awareness through network enablement, integrating space and ground-based systems to empower customers in gathering, analyzing, and securely distributing crucial intelligence data. Lockheed Martin primarily serves the United States government, alongside fulfilling foreign military sales facilitated through U.S. government contracts. Established in 1912, the corporation maintains its headquarters in Bethesda, Maryland.
Financial Metrics — LMT PE Stock Valuation Data
PE Ratio (TTM)
22.4x
PEG Ratio
0.39
Earnings Yield
4.54%
ROE (TTM)
78.8%
Revenue/Share (TTM)
$343.28
Dividend Yield
2.18%
Debt/Equity
2.04x
Frequently Asked Questions
What is the PE ratio of LMT?
The trailing twelve-month PE ratio of LMT reflects how much investors pay per dollar of Lockheed Martin Corporation's earnings. This metric is most useful when compared to Aerospace & Defense peers and the company's own historical range.
Is LMT overvalued based on PE ratio?
LMT's PE of 22.4x combined with a PEG ratio of 0.39 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Aerospace & Defense, a DCF analysis may be more appropriate.
How do I value LMT stock using PE ratio?
To value Lockheed Martin Corporation using PE: (1) Compare the current PE (22.4x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (0.39) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of LMT?
LMT's PEG ratio is 0.39, calculated by dividing the PE ratio (22.4x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for LMT stock valuation?
PE ratio gives a quick relative read — how LMT is priced versus Aerospace & Defense peers. DCF provides an absolute value based on projected free cash flows. For LMT, with a strong ROE of 78.8%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See LMT DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value LMT with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.