Tim Biggam, TradingBlock (December 13, 2011, 3:08pm CST)
|Symbol||Analyst Target Price||Target Date|
|LMT||82.00||June 15, 2012|
Lockheed Martin Corporation (ticker: LMT) is a global security company engaged in research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. It also provides a range of management, engineering, technical, scientific, logistic, and information services.
It serves both domestic and international customers with products and services that have defense, civil, and commercial applications, with its principal customers being agencies of the United States Government. It operates in four business segments: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems.
LMT has retraced it gains recently, dropping from 80 to its present level at 77.50. Technically, the stock is making higher lows, usually a sign of accumulation on dips, while the stock has had trouble punching through the 79 level with any conviction. Longer term resistance is at 82.
Lockheed Martin sports a hefty 5.I% dividend yield and just procured a $6 billion contract from Japan for 42 of its F-35 fighter jets. Additionally, LMT will build 30 F-35 jets for the US, which will generate an additional $4 billion in revenues. This should provide a decent bump to EPS for the next several quarters. While growth has tempered, the stock trades at a depressed multiple, under 7 on a forward basis.
While not looking for huge upside, I look for LMT to move back to resistance at 82 by June expiration.
Play of the Day
Based on Lockheed Martin Corporation (ticker: LMT) current market price of $76.73 and using a target price of $82.00, a target date of June 15, 2012 and $1,000 of investment capital, below are three options strategies (ranked by potential profit) and a comparative stock trade to consider should the price target be achieved at the target date.
Click on the strategy name below to access trade details using TradeBuilder on TradingBlock.com. Powered by TradingBlock's TradeBuilder.
|Strategy (click for details)||% Return at Target||Probability of breaking
even or better
|Buy Jun Call Butterfly||+274%||48%|
|Sell Jun Iron Condor||+152%||76%|
|Buy Jun Call Condor||+150%||52%|
* Click link to access TradeBuilder details on TradingBlock.com. Must have Instant or Actual account. Subject to change due to changing market conditions. Click here to view risks regarding selling stock short.
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