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Lockheed Martin vs RTX
VS
Comparative Analysis
RTX wins this head-to-head comparison against LMT, primarily driven by stronger recent earnings performance and a more compelling technical momentum profile. While LMT presents a lower valuation multiple, RTX's superior revenue growth and positive price action in its recent earnings reports suggest better forward-looking investor sentiment. RTX's ability to consistently beat earnings estimates, coupled with a higher median analyst target price, indicates a more favorable outlook. LMT, despite its lower P/E ratio, is currently trading below key moving averages and shows weaker momentum indicators. RTX, conversely, is demonstrating signs of a potential technical rebound, making it the preferred choice for investors prioritizing growth and positive price trends. The differing risk profiles and profitability metrics also lean towards RTX as the more attractive investment at this juncture.
Key Differentiator
RTX's superior revenue growth and consistent track record of beating earnings estimates are the key differentiators that give it an edge over LMT. While LMT offers a more attractive valuation multiple and superior return on equity, RTX's demonstrated ability to expand its top line and exceed market expectations points to stronger underlying business momentum and investor confidence.
Joint Outlook
The outlook for RTX appears more positive in the near to medium term, driven by its strong revenue growth and consistent earnings beats, supported by a higher median analyst target price. This suggests continued investor confidence and potential for price appreciation, assuming macroeconomic conditions remain favorable for the aerospace and defense sector. LMT's outlook is more neutral to cautiously optimistic. While its valuation is attractive and its ROE is exceptional, its current technical positioning and slower revenue growth present headwinds. A significant catalyst, such as a broader market rally or specific contract wins, would likely be needed for LMT to outperform RTX.
Price Analysis Comparison
Valuation Metrics
| Metric | LMT | RTX |
|---|---|---|
| P/E Ratio | 19.30 | 33.35 |
| Market Cap | 119.91B | 255.27B |
| Price/Sales | 1.57 | 2.73 |
| Price/Book | 13.74 | 3.85 |
| EV/EBITDA | 14.22 | 18.09 |
| Dividend Yield | 2.66% | 1.49% |
RTX trades at a P/E ratio of 33.35, significantly higher than LMT's 19.30. This suggests LMT is currently valued more attractively on a traditional earnings multiple basis. However, RTX's higher P/E is partially justified by its superior revenue growth rate of 14.5% compared to LMT's 10.5%. LMT's net profit margin of 8.16% is slightly lower than RTX's 8.28%, indicating comparable operational efficiency at the net income level. While LMT appears cheaper on a P/E basis, RTX's higher revenue growth suggests a stronger business expansion, which may warrant its premium valuation. Investors should consider whether RTX's growth prospects justify its higher earnings multiple relative to LMT's more value-oriented positioning.
Profitability & Efficiency
| Metric | LMT | RTX |
|---|---|---|
| Rev. Growth (Qtly) | 10.50% | 14.50% |
| Profit Margin | 8.16% | 8.28% |
| Return on Equity | 89.17% | 12.27% |
| Return on Assets | 8.64% | 4.21% |
| Debt/Equity | 234.24 | 57.02 |
RTX exhibits a slightly higher net profit margin at 8.28% compared to LMT's 8.16%, indicating marginally better profitability on each dollar of revenue. This suggests LMT is far more effective at generating profits from shareholder investments. LMT's exceptionally high ROE is a standout metric, indicating superior management of equity capital. While RTX's ROA is also lower than LMT's (4.21% vs 8.64%), its higher net profit margin provides some offset. The choice between them hinges on whether one prioritizes superior return on equity or slightly better net margins coupled with higher revenue growth.
Earnings Reality Check
LMT
Last 2 Qs: LMT beat estimates 1x out of 2. Fell 1x after beats. (Sell the news?)
RTX
Last 4 Qs: RTX beat estimates 4x out of 4. Fell 2x after beats. (Sell the news?)
Technical Indicators
| Indicator | LMT | RTX |
|---|---|---|
| RSI (14) | 46.20 | 23.00 |
| 50-Day MA | $557.31 | $207.64 |
| 200-Day MA | $562.01 | $194.69 |
RTX is showing signs of potential technical strength, with its RSI at 23 indicating it is oversold and potentially due for a bounce, despite trading below its 50-day ($207.64) and 200-day ($194.69) moving averages. LMT, conversely, is trading below both its 50-day ($557.31) and 200-day ($562.01) moving averages, with an RSI of 46.2 suggesting it is in a neutral to slightly bearish trend. LMT's technical indicators, including a negative MACD and a low stochastic reading (14.15), point to a lack of upward momentum. RTX's stochastic at 16.04, while also low, is slightly higher and could signal an upcoming upward move from oversold conditions. RTX's price action near its day's low (187.56) compared to its previous close (188.61) shows some intraday weakness, but its proximity to its 52-week low (155.64) might offer a better risk-reward for a rebound.
AI Analyst Sentiment
Technical rating: based on current price action versus moving averages and momentum. This measures short-term chart trend, not analyst opinion or company fundamentals.
LMT
Technical Score: 59/100
RTX
Technical Score: 21/100
Why the ratings differ: RTX currently scores poorly on technical momentum (price sitting below key moving averages), while the analyst view below reflects forward-looking estimates of the business. A stock can be technically weak and still carry bullish analyst targets: the two measure different things over different horizons.
RTX garners a more favorable analyst sentiment, with a median target price of $240, representing a significant upside potential from its current price of $189.40. The analyst ratings are also more bullish, with 15 'Buy' or 'Strong Buy' ratings out of 23 analysts, compared to LMT's median target of $629.50, which offers less implied upside from its current $519.56 price. LMT has a higher concentration of 'Hold' ratings (11 out of 20 analysts), suggesting a more cautious view from the analyst community despite its lower valuation. RTX's stronger analyst consensus and higher median target price indicate greater confidence in its future performance and growth prospects.Note: While LMT shows stronger short-term technical momentum (Hold 59/100), the AI comparative analysis favors RTX (Sell 21/100) based on its overall trend structure, fundamentals, and risk-adjusted outlook.
Risk Stratification
| Metric | LMT | RTX |
|---|---|---|
| Beta (Volatility) | 0.10 | 0.29 |
| Sharpe Ratio | 0.12 | 1.03 |
For RTX, the primary risks include its high P/E ratio, which makes it vulnerable to significant pullbacks if growth expectations are not met or if market sentiment shifts away from higher-multiple stocks. Its lower return on equity also suggests less efficient capital utilization compared to LMT, which could be a drag on long-term performance. LMT faces risks related to its current technical weakness, trading below key moving averages and showing a lack of momentum, which could lead to further price declines. Its lower revenue growth rate compared to RTX might also indicate a more mature business cycle. Also, its mixed earnings surprise history and a higher proportion of 'Hold' ratings from analysts suggest potential headwinds to significant upside.
Comparative ProTips
- Consider RTX for its growth momentum and earnings beat potential, accepting its higher valuation.
- LMT remains an option for value-oriented investors who prioritize return on equity, but be aware of its current technical weakness.
- Monitor RTX's ability to sustain its revenue growth and analyst targets to justify its premium valuation.
- For LMT, watch for a technical breakout above its 50-day and 200-day moving averages as a signal of renewed strength.
Monte Carlo Projection (10yr)
Actionable Trade Plans
Compare entry, exit, and risk management levels for both assets
Select Your Trade Bias
Risk Tolerance
Conservative
3%
Aggressive
Portfolio Value
$
✎
Position Size: $200 - $300 per asset
LMT
Current: $519.56
ENTRY ZONES
Conservative
$529.95
Aggressive
$519.56
RISK MANAGEMENT
STOP LOSS
$545.85
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$503.45
+10%
$476.96
+15%
$450.46
RTX
Current: $189.40
ENTRY ZONES
Conservative
$193.19
Aggressive
$189.40
RISK MANAGEMENT
STOP LOSS
$198.98
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$183.53
+10%
$173.87
+15%
$164.21
Calculate Your Trade
Disclaimer
This comparison involves assets with varying risk profiles. The content is for educational purposes only. Identifying the stronger asset is based on relative strength (RS) and technical convergence. Past correlation does not guarantee future lockstep movement. Trading involves risk of loss. Note: The AI favored RTX based on price momentum. This is valid for the specified timeframe only. While LMT currently shows the stronger short-term technical score (59 vs 21), the AI favors RTX on the factors above rather than today's technical setup.
Frequently Asked Questions
Which is a better buy, LMT or RTX?+
RTX is the preferred buy due to its stronger revenue growth and consistent earnings beats, suggesting better forward momentum. LMT offers a lower valuation and superior ROE, but its technicals and earnings consistency are less compelling.
What are the key risks for LMT vs RTX?+
LMT's risks include its current technical weakness and slower revenue growth, while RTX faces risks from its high valuation multiple and lower capital efficiency.
How do LMT and RTX compare on valuation?+
LMT trades at a P/E of 19.30, significantly lower than RTX's 33.35, making LMT appear more undervalued on this metric. However, RTX's higher revenue growth rate of 14.5% compared to LMT's 10.5% offers some justification for its premium.
What is the earnings outlook for LMT and RTX?+
RTX has a more positive earnings outlook, evidenced by consistent positive earnings surprises and a higher median analyst target price. LMT's earnings have been mixed, with one recent report matching estimates and causing a price drop.
How do their profitability metrics compare?+
LMT leads significantly in return on equity (89.17% vs 12.27%), indicating superior capital efficiency. RTX has a slightly higher net profit margin (8.28% vs 8.16%).
What do technical indicators suggest for LMT and RTX?+
RTX shows signs of potential technical strength with an oversold RSI (23), while LMT is trading below key moving averages with neutral momentum (RSI 46.2).
How does analyst sentiment differ between LMT and RTX?+
Analysts are more bullish on RTX, with a higher median target price ($240 vs $629.50 for LMT, but offering more implied upside from current prices) and a greater proportion of buy ratings. LMT has a higher number of hold ratings.