Deutsche Bank has downgraded Lockheed Martin’s stock from “Buy” to “Hold,” citing concerns about future demand for the company’s F-35 fighter jet as China makes progress in its combat aircraft programs. The bank also lowered its price target for Lockheed Martin from $611 to $523.
The downgrade follows the release of videos on Chinese social media allegedly showing test flights of China’s sixth-generation stealth fighter jets. Analysts suggest these advancements could threaten the competitiveness of the F-35, which accounts for 25% of Lockheed Martin’s sales.
JUST IN: 🇨🇳 First video of the brand new Chinese stealth fighter jet, believed to be a 6th-generation warplane. pic.twitter.com/XsE2Q2fpE9
— BRICS News (@BRICSinfo) December 26, 2024
Lockheed Martin’s third-quarter financial results showed net sales of $17.1 billion, a 1% increase from the same period last year, and net earnings of $1.6 billion. Despite raising its quarterly dividend by 5%, Deutsche Bank expressed disappointment with the company’s performance, including a drop in free cash flow from $2.5 billion to $2.1 billion.
The U.S. Air Force’s sixth-generation fighter program, known as Next-Generation Air Dominance (NGAD), has faced delays due to cost concerns, leaving uncertainty about how the U.S. will respond to China’s advancements.
The videos, while not officially confirmed by China, have sparked speculation about Beijing’s progress. Defense analysts warn these developments could shift the balance of power in military aviation and reduce demand for existing fifth-generation fighters like the F-35.
