Citigroup: Bullish on Lockheed Despite Slightly Weak Quarter

Despite slightly weaker than expected first quarter results from Lockheed Martin Corp. (LMT) that were blamed on lower sales and caused investors to drive the stock down more than 2% on Tuesday, Citigroup analyst George Shapiro continues to be bullish on the defense company.

One of the reasons behind his “buy” recommendation and US$108 price target, which represents upside of roughly 14%, is the company’s strong cash flow.

Free cash flow was about US$1.4-billion, or two times net income, Mr. Shapiro told clients in a note.

Lockheed also raised guidance by US$100-million.

The analyst boosted his earnings per share estimate for 2007 by US30¢ a share to US$6.40 and for 2008 and 2009 by US10¢ per share.

He added that Lockheed Martin has a good record of delivering on its sales guidance.