Lockheed Martin (LMT) will be hosting an Aeronautics analyst meeting on Wednesday evening and Thursday. Citi strongly recommends buying the stock ahead of this meeting. The bank is especially excited about potential for news regarding Joint Strike Fighter (JSF) aircraft procurement by the defence Department.
Citi believes there is $0.40 EPS upside from the Joint Strike Fighter:
Industry sources have said that the defence Department plans to increase procurement by $12 billion above plan in its fiscal year 2010 budget to be presented to Congress in February, or over 10% from the current projection of $111 billion. A large portion of the increase is directed toward fighter aircraft, particularly accelerating purchases of Joint Strike Fighter aircraft (estimated 9% of LMT sales in 2008). We believe the market has viewed the planned ramp of JSF skeptically and as a potential target of cuts under a new administration, but we believe this latest news suggest strong support for the program within the DoD and that upside exists.
Citi reiterates BUY on Lockheed Martin (LMT), target $119.
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