Sell Lockheed Martin to buy later at lower valuations

0
By:

Motiur Rahman

on
Jun 13, 2022

Lockheed Martin is fundamentally strong, but bear markets are pushing the price down.

Pressure on the price can be expected to continue to $400.

We recommend selling Lockheed Martin now to buy later at a lower valuation.

Lockheed Martin Corporation (NYSE:LMT) has enjoyed support since the war in Ukraine started. The war triggered a need for many countries to increase war stockpiles. The share hit the highest valuation of $474 in April. It has since pulled back to $430. We think the decline will continue.

Lockheed Martin is fundamentally strong. The company is recording growth as demand for arms increases. The EPS of $22.72 and PE of 19 indicate the price is still attractive for the largest defense stock. The ROE is at a 76.16% high. These factors still make the stock attractive to long-term investors.


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Despite strong fundamentals, bear market pressures weigh down the share price. News of growing demand is not helping support the price. Our analysis indicates that stock will decline until the next release of earnings at the end of July.

Lockheed Martin declines towards $400

Source – TradingView

The stock hit the highest valuation of $474 in April. Since then, the stock has been on a declining trend. The analysis also shows that Lockheed Martin struggles to maintain valuations above $440. The prevailing price of $430 is just above the support level of $425.

We project that the price will fall gradually to a new support level of $400 ahead of the earnings. Both the RSI and MACD indicate that the stock is under bearish momentum. Divergence from the signals has continued to increase.

Summary

We recommend selling Lockheed Martin. Though fundamentally strong, the price is under downward pressure. The decline will stop at $400, just ahead of the next earnings release.

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