Lockheed's MFC Unit Set to Grow on Strong Contract Wins

Lockheed Martin Corp. LMT, the largest U.S. defense contractor, enjoys a prominent position in the global defense map. Through its Missiles and Fire Control (MFC) segment, it designs, develops and manufactures precision strike weapons like missiles, rockets, and other advanced combat solutions for the U.S. military, NASA, allied forces and international defense customers worldwide.
 
Thanks to LMT’s experience of delivering cutting-edge products to the defense market, it enjoys a solid inflow of contracts for its combat-proven products under the MFC unit, like AN/TPQ-53 Radar System and Long-Range Discrimination Radar, as well as Long Range Anti-Ship Missile. This, in turn, bolsters this unit’s revenue growth. The MFC unit reported a year-over-year increase of 12.7% in sales in Q1 2025, 8% in Q3 2024, 12.6% in Q2 2024 and 25.3% in Q1 2024.

The unit recently secured several defense contracts which should boost its performance in the days ahead. In June 2025, the unit won a contract for the production of Generation 4 Target Acquisition Designation Sight/Pilot Night Vision Sensor systems. This contract supports the recent U.S. Government Foreign Military Sales agreement for the AH-64E Apache attack helicopters for the Polish Air Force. In May, the MFC unit clinched a $214.4 million contract for the recapitalization of the Multiple Launch Rocket System (MLRS) into the M270A2 configuration. Moreover, in March, the company secured a $4.94 billion contract for the production of Precision Strike Missiles.

Contract Wins Boost Outlook for Key Defense Players

As nations worldwide race to modernize their defense systems, prominent U.S.-based defense contractors like Northrop Grumman NOC and RTX Corporation RTX are also securing more and more contracts for their combat-proven products, thereby ensuring a steady revenue stream for themselves. In June 2025, RTX won a $1.10 billion contract modification for the production and delivery of AIM-9X Lot 25 missiles. In May, RTX secured a $1 billion contract to supply up to 55 Standard Missile-3 (SM-3) missiles.

On the other hand, Northrop clinched a $267.2 million contract in March to manufacture and deliver two MQ-4C Triton unmanned air systems and provide the U.S. Navy with a main operating base, along with associated support, related technical and administrative data services. The company clinched a $481.3 million contract in January for providing updates and improvements to the Integrated Air and Missile Defense Battle Command System's software.

LMT’s Price Performance, Valuation and Estimates

Shares of LMT have gained 1.5% in the past year compared with the industry’s 14.5% growth.

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The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.43X compared with its industry’s average of 26.41X.

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The Zacks Consensus Estimate for LMT’s 2025 earnings has improved over the past 60 days. However, the same for the second and third quarter of 2025 has gone south.

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LMT stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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