LMT
Lockheed Martin Corporation
$504.02
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 1.4% above fair value
You pay
$504.02
Bear
$406.76
Fair
$497.16
Bull
$587.55
Bear
$406.76
-19.3%
$22.60 × 18x
Fair
$497.16
-1.4%
$22.60 × 22x
Bull
$587.55
+16.6%
$22.60 × 26x
Adjust Assumptions
22.0x
22.6$
Key Value Driver
Through-cycle normalized EPS ($22.60)
Implied Market Multiple
22.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$635.33
Divergence from AlphaVal
22%
Summary
Using 7-year normalized EPS of $22.60 at a 22x cycle multiple, the base-case value is $497.16 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing