Citi adds Karman Holdings catalyst watch as ’Defense Now’ thesis takes hold

Investing.com -- Citi has upgraded Lockheed Martin to Buy and opened a positive 90-day catalyst watch on Karman Holdings, as analyst John Godyn said his tactical framework of "Aerospace First, Defense Next" has evolved into "Defense Now."

Godyn set a $582 price target on Lockheed Martin, implying approximately 17% expected total return, citing cheap valuation, improving fundamentals and exposure to fast-growing themes through its MFC segment.

He noted that Lockheed "historically bounces back consistently and sharply" after the type of quarterly decline it has recently experienced, adding that the stock has registered "one of its worst quarterly declines in modern history" when measured against its February peak.

On Karman Holdings, Citi maintained its Buy rating and $76 price target, implying approximately 52% upside from current levels.

Godyn flagged three reasons for the catalyst watch, including valuation compression significantly greater than aerospace and defense peers, a high likelihood of a second-quarter beat-and-raise, and what he described as unique exposure to "key megatrends" set to accelerate through the remainder of 2026 and into 2027.

More broadly, Citi said it sees "less of a case for big beats in defense than aerospace but much more opportunity for multiples to drive outsized reactions" as investors recognize that growth trends are likely to accelerate into year-end 2026 and beyond.

On aerospace, Godyn said the rally is not over, reiterating bullish views on commercial aftermarket stocks and existing positive catalyst watches on RTX and LOAR, noting that intra-quarter KPIs have been "unusually strong."

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