While both RTX and Lockheed Martin are strong companies, analysts suggest that RTX is a better buy for 2025. This is due to RTX's strong financial performance, analyst upgrades, and potential for share price growth. Lockheed Martin, on the other hand, is expected to experience a period of consolidation until later in the year.
Both RTX and Lockheed Martin are high-quality companies with the potential to deliver long-term shareholder value and propel their share price s upward. However, current business trends and analyst sentiment suggest that RTX presents a compelling buy opportunity for 2025, while Lockheed Martin might experience a period of consolidation until later in the year. RTX 's share price is projected to climb in 2025, potentially reaching a 25% gain before peaking.
Conversely, Lockheed Martin's share price is likely to remain near its early February levels until market conditions improve. Several factors are driving these divergent trajectories. Lockheed Martin had a respectable 2024 and a solid fourth quarter, but its performance was hampered by softness in two of its four segments. The company's net revenue of $18.62 billion also fell short of the previous year's figures, contrasting with the growth witnessed by competitor RTX. A critical concern for Lockheed Martin is the mounting losses incurred on classified projects. The company holds numerous contracts for producing classified results across various segments, and these losses are escalating. Worryingly, these classified project losses are encroaching on profits and guidance, and are anticipated to worsen further. While Lockheed Martin executives project a decent year in 2025, sufficient to maintain capital returns and a healthy balance sheet, it falls short of analyst expectations. The potential for underperformance looms large if these losses persist. In contrast, RTX demonstrated robust growth, with an 8.5% revenue increase surpassing MarketBeat's reported consensus by a significant margin. Growth was observed across all operating segments, including both commercial and government businesses. The company's organic growth stood at 11%, accompanied by margin expansion. This margin expansion resulted in substantial, double-digit gains at the bottom line, rising 19% on an adjusted basis and nearly 1200 basis points better than forecasted. The analysts' response further differentiates RTX's trajectory from Lockheed Martin's. Analyst sentiment for LMT remains moderately bullish, with a consensus forecast predicting a 20% upside by early February. However, price targets are trending downwards. MarketBeat tracked six revisions from 15 analysts following Q4 earnings, with all six revisions resulting in lower price targets. While they still anticipate substantial upside, it falls below the initial consensus, and estimates may continue to decline, posing a headwind for the market. RTX, on the other hand, enjoys tailwinds from its analysts. Within days of the earnings release, MarketBeat tracked nine revisions, including a 100% increase in price targets and an upgrade to buy. These revisions suggest the market is likely to move towards the higher end of analyst targets, achieving a 25% upside from critical resistance levels.
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