Collins Stewart Downgrades Lockheed Martin (LMT) to Hold; Facing Two Major Issues In Coming Quarters
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Collins Stewart downgrades Lockheed Martin (NYSE: LMT) to Hold.
Collins analyst says, "We are lowering our recommendation to Hold because Lockheed faces two major issues over the coming quarters, which we believe will limit multiple expansion and cap the shares. First, a mix shift from higher-margin F-16 and F-22 revenues to F-35 revenues will pressure margins in the Aeronautics sector. Second, increased pension expense will pressure EBIT margins for 2010 as well as 2011. We believe the overall budget pressure and the company's lack of exposure to commercial business leveraged to a recovering economy will also limit EPS and multiple upside. The company does generate significant cash which it can use to fund buybacks and should benefit from a lower tax rate should the R&D tax credit get reinstated, but we believe these do not merit significant multiple expansion."
To see more analyst ratings on LMT Click Here.
Lockheed Martin Corporation engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services in the United States and internationally.
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