Is Lockheed Martin Corporation (LMT) overvalued?
On Equity Rank's model estimate, LMT trades close to its fair value (1% below it). Lockheed Martin Corporation (LMT) last closed at $567.08; the multi-method model fair value is $573.48.
| Price | Model fair value | Price vs model |
|---|---|---|
| $567.08 | $573.48 | 1% below |
What the answer rests on
- 6 of 10 valuation methods put LMT's value above its price and 4 put it below, so the methods disagree.
- To justify today's price, LMT's free cash flow would need to grow about -4.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 4.0% a year.
- LMT trades at 20.5 times its last year's earnings, against a median of 31.8 for 37 profitable Aerospace & Defense companies.
- Over the past year the price sat below the model fair value on 20% of trading days. The gap ranged from 6% below to 40% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind LMT's fair value · What prices assume · Other companies