Lockheed Martin lowered at Deutsche Bank, worried about China and F-35 sales
Jan. 02, 2025 3:43 PM ET
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By:
, SA News Editor
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Lockheed Martin (NYSE:
) -0.6% in Thursday's trading as Deutsche Bank downgrades shares to Hold from Buy with a $523 price target, cut from $611, citing doubts about F-35 sales because of China's progress in developing jet fighters.
Referring to his upgrade of the stock six months ago, believing earnings growth would accelerate, analyst Scott Deuschle said his "prior thesis struggles to hold water and we have increased concern on the long-term support for F-35 in the face of China's combat aircraft modernization efforts."
Deuschle said he is "struggling to find a compelling upside case on estimates," and "the reveal of further advancements in combat aircraft capabilities by China as potentially undermining long-term DoD demand for the F-35 aircraft."
"The developments in China are likely to accelerate the need for NGAD [next-generation air dominance], and the ultimate success in fielding NGAD by the early-mid 2030s could... partially cut into the F-35 procurement program," Deuschle added.
The analyst is generally optimistic on the aerospace and defense sector entering 2025, citing robust demand for key suppliers, and named RTX (
) and Northrop Grumman (
) as his preferred defense stocks.