Lockheed Martin Stock Hit With "Underperform" Rating Before Earnings

Lockheed Martin will announce third-quarter results before the open on Tuesday, Oct. 18

Deputy Editor
Oct 12, 2022 at 3:24 PM
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Lockheed Martin Corp (NYSE:LMT) is down 2.1% to trade at $402.37 at last check, after a pre-earnings bear note from Credit Suisse. The firm initiated coverage on LMT with an "underperform" rating and $375 price target after the close yesterday, noting the stock's "unattractive" valuation and negative sales growth within this revision year for the company, among other headwinds. 

The aerospace name will report third-quarter earnings before the open on Tuesday, Oct. 18. Of its last eight post-earnings sessions, only two finished positive, painting a fairly negative picture for the stock. The options are pricing in a 4.4% next-day swing, regardless of direction, for next week, slightly more than the 3.6% move the stock averaged over the last two years. 

Options traders are overwhelmingly bullish on LMT. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 2.25 ranks higher than all other readings from the past year. This means calls have been picked up at their fastest rate in 12 months.

Now looks like a good time to weigh in with options, too. The security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 82 out of 100, meaning Lockheed Martin stock has exceeded option traders' volatility expectations during the past year.

Since the start of 2022, LMT is up 13%. A confluence of moving averages, including the 40- and 200-day trendlines, cut its most recent rally short, however. 

LMT Oct12




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