Overview
UBS moved Lockheed Martin into a Buy stance from Neutral and increased its 12-month price target to $674 from $581, implying roughly 26% upside from the company's reported share price of $524.48 on Sept. 4. The bank projects that Lockheed will outpace current estimates with a longer and stronger earnings expansion underpinned by rising missile demand, F-35 sustainment work and other defense programs.
Revenue and earnings projections
UBS expects Lockheed Martin to achieve a 9% compound annual growth rate in revenue through 2028, a rate that the bank says sits above consensus. Alongside top-line growth, UBS anticipates double-digit upside to consensus adjusted earnings per share by 2028. The bank's modeled revenue path shows an increase from $75.0 billion in 2025 to $81.0 billion in 2026, $88.5 billion in 2027 and $96.1 billion in 2028. Adjusted EPS are forecast to climb from $21.48 in 2025 to $30.69 in 2026, $34.50 in 2027 and $39.34 in 2028.
Missiles and Fire Control - the primary growth driver
UBS identifies Lockheed's Missiles and Fire Control (MFC) segment as the principal engine for the company's multi-year expansion. The bank expects production volumes for systems including PAC-3, THAAD, PrSM and JASSM/LRASM to rise sharply. In UBS's forecast, MFC revenue grows from $14.5 billion in 2025 to $35.7 billion by 2030, which corresponds to an average annual growth rate of more than 20% over that period.
Large multiyear contracts are cited as increasing Lockheed's visibility into future production levels. UBS points to a $35 billion THAAD award and a nearly $60 billion PAC-3 framework agreement. The bank also notes that Lockheed's book-to-bill ratio reached 3.2 times in the most recent quarter, compared with 1.2 times in 2025.
UBS argues that the missile production ramp is not merely a transient spending cycle. The bank notes that recent conflicts have depleted inventories of advanced interceptors, prompting governments to reassess stockpile needs and boost procurement for missile defense and precision strike capabilities. UBS estimates that production of some key missile platforms could be roughly four times higher in 2035 than in 2025.
F-35 sustainment and other program contributions
Beyond missiles, UBS highlights the F-35 program as a reliable source of recurring revenue. While aircraft manufacturing is expected to hold broadly steady, the bank projects sustainment revenue for the F-35 to increase from $5.1 billion in 2025 to $8.8 billion in 2030, supported by a larger global fleet and greater spending aimed at improving aircraft readiness.
Other programs are expected to further diversify Lockheed's growth profile. UBS anticipates increases in budgets for the Trident fleet ballistic missile program, forecasting a proposed $5.2 billion in fiscal 2027, and sees potential CH-53K helicopter funding of up to $4.1 billion.
Cash flow, capital spending and financial trajectory
UBS expects Lockheed to materially increase capital expenditure as the company ramps missile production capacity. The bank forecasts capex rising to 3.2% of revenue in 2027, which it characterizes as the highest level in more than a decade. Despite this elevated investment profile and a pension-related headwind in 2027, UBS projects free cash flow to accelerate in tandem with EBITDA growth, with free cash flow per share increasing by roughly 50% by 2030.
Implications for investors
On the basis of these forecasts, UBS raised its 12-month price target to $674 and upgraded Lockheed Martin stock to Buy. The bank's outlook rests on a sustained expansion in missile production, growing sustainment revenues from major aircraft programs, and large award-backed visibility that collectively support both top-line and cash generation improvements over the coming years.
Note: All figures and projections in this report reflect UBS research findings as presented by the bank.