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Lockheed Martin vs RTX
VS
Comparative Analysis
RTX wins this head-to-head comparison against LMT, primarily driven by its superior revenue growth and stronger recent earnings performance. While LMT shows a higher return on equity, RTX's broader analyst support and higher median target price suggest greater upside potential. RTX's current valuation, though higher on a P/E basis, is justified by its growth trajectory. Both companies operate in the defense sector, facing similar macro tailwinds and geopolitical risks, but RTX's operational execution and market sentiment currently give it the edge. RTX's ability to consistently beat earnings estimates, coupled with a higher revenue growth rate, positions it for better performance moving forward. LMT, while stable, exhibits slower growth and a more bearish technical setup. Investors seeking growth within the defense sector should favor RTX, while LMT may appeal to more risk-averse investors prioritizing a higher dividend yield and a stronger return on equity, albeit with less growth potential.
Key Differentiator
RTX's superior revenue growth and more consistent earnings beats are the primary differentiators, signaling a more dynamic and expanding business compared to LMT. This growth, combined with stronger analyst conviction and a higher median price target, suggests RTX is better positioned for future appreciation, despite its higher current valuation multiple.
Joint Outlook
The outlook for RTX is more positive, driven by its higher revenue growth and consistent earnings performance, suggesting continued market share gains and operational efficiency. Analysts are more bullish on RTX, with a higher median target price indicating expectations for significant upside. LMT's outlook is more stable but less dynamic, characterized by slower growth and a more mixed analyst sentiment. While its profitability metrics are strong, the lack of significant growth and current technical weakness present headwinds. RTX is expected to outperform LMT over the next 6-12 months, assuming current trends in revenue growth and earnings execution persist.
Price Analysis Comparison
Valuation Metrics
| Metric | LMT | RTX |
|---|---|---|
| P/E Ratio | 18.78 | 32.81 |
| Market Cap | 117.61B | 250.64B |
| Price/Sales | 1.53 | 2.69 |
| Price/Book | 13.37 | 3.78 |
| EV/EBITDA | 13.88 | 17.66 |
| Dividend Yield | 2.71% | 1.52% |
RTX trades at a higher P/E ratio of 32.81 compared to LMT's 18.78, indicating a premium valuation for RTX. However, this premium is supported by RTX's significantly higher revenue growth rate of 14.5% versus LMT's 10.5%. LMT's lower P/E suggests it may be undervalued relative to its earnings power, but RTX's growth justifies its higher multiple in the current market. Both companies are trading below their 52-week highs, with LMT at $509.59 versus a high of $692, and RTX at $185.97 versus a high of $226.88. LMT is closer to its 52-week low ($437.25) than RTX is to its ($155.64), suggesting more downside risk for LMT from its peak. RTX's current price is also further from its 52-week low, indicating a stronger recovery from its lows.
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 |
LMT exhibits superior profitability metrics, boasting a higher return on equity (ROE) of 89.17% compared to RTX's 12.27%. LMT also has a slightly better return on assets (ROA) at 8.64% versus RTX's 4.21%. Both companies maintain very similar net profit margins, with RTX at 8.28% and LMT at 8.16%, suggesting comparable efficiency in converting revenue to profit. Despite LMT's stronger ROE and ROA, RTX's higher revenue growth rate suggests it is effectively deploying its capital to expand its business. The difference in ROE is substantial and warrants attention, potentially indicating LMT's more efficient use of shareholder equity, but RTX's growth profile may offer a more compelling investment case for some.
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) | 28.72 | 32.39 |
| 50-Day MA | $549.08 | $203.30 |
| 200-Day MA | $563.66 | $194.99 |
Both LMT and RTX are currently exhibiting bearish technical signals, trading below their 50-day and 200-day moving averages. LMT's RSI is at 28.72 and RTX's is at 32.39, both indicating oversold conditions. LMT's MACD is at -10.83, deeper in negative territory than RTX's -5.11, suggesting stronger downward momentum for LMT. RTX's stochastic indicator is at 43.30, closer to neutral than LMT's 31.47, implying slightly less oversold pressure. While both are in downtrends, RTX shows marginally better signs of potential stabilization compared to LMT, which appears more significantly entrenched in its decline. The price action for both suggests caution, but RTX's indicators are slightly less negative.
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: 59/100
RTX enjoys stronger analyst support, with 16 'Strong Buy' or 'Buy' ratings out of 23 analysts, and a median target price of $240, representing a significant upside potential from its current price. LMT has a more mixed analyst view, with 8 'Strong Buy' or 'Buy' ratings out of 21 analysts, and a median target price of $629, which also offers upside but is a smaller percentage gain from its current price. The higher proportion of buy ratings and the greater implied upside from the median target price for RTX suggest a more positive sentiment among analysts covering the stock. LMT's analyst ratings are more distributed towards 'Hold', indicating less conviction from the analyst community compared to RTX.
Risk Stratification
| Metric | LMT | RTX |
|---|---|---|
| Beta (Volatility) | 0.10 | 0.31 |
| Sharpe Ratio | -0.16 | 0.80 |
For RTX, key risks include potential program delays or cost overruns in its major defense contracts, increased competition from domestic and international rivals, and the impact of evolving geopolitical tensions on defense spending priorities. A significant slowdown in global economic growth could also dampen demand for its aerospace and defense solutions. LMT faces similar risks related to contract execution, geopolitical shifts, and competition. Additionally, its higher dividend yield, while attractive, could be at risk if earnings falter, and its lower revenue growth makes it more susceptible to market share erosion. LMT's greater proximity to its 52-week low also presents a risk of further price depreciation if market sentiment sours.
Comparative ProTips
- Consider RTX for its growth potential, driven by strong revenue expansion and consistent earnings beats.
- Monitor LMT's dividend yield and ROE as potential value indicators, but be aware of its slower growth trajectory.
- Both stocks are technically oversold; watch for potential short-term bounces, but the longer-term trend favors RTX based on fundamentals.
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: $509.59
ENTRY ZONES
Conservative
$484.11
Aggressive
$509.59
RISK MANAGEMENT
STOP LOSS
$469.59
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$508.32
+10%
$532.52
+15%
$556.73
RTX
Current: $185.97
ENTRY ZONES
Conservative
$176.67
Aggressive
$185.97
RISK MANAGEMENT
STOP LOSS
$171.37
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$185.51
+10%
$194.34
+15%
$203.17
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 growth trajectory. This is valid for the specified timeframe only.
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, supported by more favorable analyst sentiment and a higher median price target. LMT offers a higher dividend yield and ROE but lags in growth.
What are the key risks for LMT vs RTX?+
Both face geopolitical and contract execution risks. RTX's growth may be impacted by competition and economic slowdowns, while LMT's lower growth and higher dividend yield could be vulnerable to earnings pressure.
How do LMT and RTX compare on valuation?+
RTX trades at a higher P/E (32.81) than LMT (18.78), but RTX's higher valuation is supported by its superior revenue growth rate (14.5% vs 10.5%).
Which stock has better earnings performance?+
RTX has demonstrated more consistent earnings beats, exceeding estimates in its last three quarters with significant surprises, whereas LMT had a mixed recent performance.
What is the profitability comparison between LMT and RTX?+
LMT leads significantly in return on equity (89.17% vs 12.27%) and return on assets (8.64% vs 4.21%), while net profit margins are nearly identical (LMT 8.16%, RTX 8.28%).
How do the technicals of LMT and RTX compare?+
Both stocks show bearish technicals, trading below key moving averages with oversold RSI levels. RTX exhibits slightly less negative momentum and is closer to neutral on its stochastic indicator compared to LMT.
What is the analyst sentiment for LMT versus RTX?+
RTX has stronger analyst support with more buy ratings and a higher median price target, indicating greater positive sentiment and perceived upside potential compared to LMT.