LMT Stock Spirals Amid CEO Resignation

The stock is off roughly 30% from its mid-February peak

Assistant Editor
Mar 16, 2020 at 2:03 PM
facebook twitter linkedin

Lockheed Martin Corporation (NYSE:LMT) is down 5.6% to trade at $310.44 amid news that the security and aerospace company's CEO, Marillyn Hewson, will be stepping down on June 15, replaced by tapped board member and American Tower Corp leader James Taiclet. Robert Stallard of Vertical Research chimed in saying that with Hewson acting as Chairman, the brokerage firm did no foresee any "revolutionary changes." 

Since its all-time peak of $442.53 LMT has taken a nosedive down the charts, off roughly 30% from its record highs, made worse by a recent bear gap breaching the 320-day moving average. Plus, today's plummet puts the stock at a new annual low. 

Despite this, analysts sentiment remains optimistic, with six out of 10 sporting a "strong buy" rating. Plus, the 12-month consensus price target of $456 represents an area untouched by the equity, and sits at a 51% premium to current levels. 

Shorts are jumping ship, though it's likely many of these bears are in profit-taking mode, with short interest down 8.1% in the last reporting period, leaving 3.52 million shares accounting for only 1.3% of the stock's available float. It's also worth noting that LMT is on the short-sale restricted (SSR) list today. 

In the options pits, puts are being favored, per LMT's 10-day put/call volume ratio of 0.78 at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 87% of readings from the past year. This suggests that long puts are being picked up at a much quicker-than-usual clip.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners