JP Morgan Downgrades Lockheed Martin Corporation (LMT) Citing Cash Flow Concerns

Lockheed Martin Corporation (NYSE:LMT) is among the 7 Best Defense Dividend Stocks to Buy. On December 19, JP Morgan downgraded the stock’s rating to Neutral from Overweight, citing concerns about the defense contractor’s long-term cash flow estimates.

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Analyst Seth Seifman told investors in a research note that pension-related outflows expected next year were likely to limit cash flow growth, making the anticipation of an 8% growth appear optimistic.

The firm said it had a bullish outlook on stocks in the aerospace and defense sector heading into 2026 and lifted its price target on Lockheed Martin Corporation (NYSE:LMT) to $515 from $465.

However, JP Morgan believes investors should be selective when it comes to picking defense stocks, where returns could face variations from budgeting risks, program executions, and political factors.

This follows Morgan Stanley’s adjustment on Lockheed Martin Corporation (NYSE:LMT) on December 16, when the firm downgraded the stock’s rating to Equal Weight from Overweight, and slashed its price target to $543 from $630 as part of its broader outlook for the sector in 2026.

As of the close of business on December 22, Wall Street analysts have a consensus Hold rating for the stock, with a one-year average share price target of $524.93, representing an upside of 9%.

Lockheed Martin Corporation (NYSE:LMT) is one of the largest defense contractors in the world. It is famed for manufacturing notable fighter jets, including the F-35.

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