Cowen Raises Price Target on Lockheed Martin (LMT) Based on Extended Visibility

Cowen reiterated a Market Perform rating on Lockheed Martin (NYSE: LMT), and raised the price target to $220.00 (from $200.00), on extended visability. Expected F-35 revenue/margin build should easily outweigh production end on F-16 (Q3:17) & C-5M (mid-'18) to allow 5%-type 2016-18 Aeronautics revenue gains with modestly uptrending margins. Proposed acquisition of Sikorsky for 11.5x EBITDA (net of tax benefits) & divestiture of $6B in services ops would bolster LMT in franchise hardware while paring exposure to an area with lower entry barriers.

Analyst Cai Rumohr commented, "We see solid core EPS gains through 2018; but LMT's sensible portfolio redo entails 2016 EPS dilution not yet in consensus estimates although with potential offsets. Extended visibility, a peer-high 3.2% dividend yield, & 6.8% cash flow yield make LMT a relatively safe place to hide with upside to $220 (3.0% yield) despite a peer-high 16.1x P/E."

For an analyst ratings summary and ratings history on Lockheed Martin click here. For more ratings news on Lockheed Martin click here.

Shares of Lockheed Martin closed at $203.89 yesterday.

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