Lockheed Martin Delivers 123 F-35 Fighter Jets In 2020 As Covid-19 Hits Supply

Lockheed Martin reported that it delivered 123 of its F-35 fighter jets this year, which is 8% below the company’s original annual target.

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Lockheed Martin (LMT) said that in response to COVID-19 related supplier delays, the initial annual delivery goal was revised in May from 141 to 117-123 aircraft to avoid higher production-related costs and future delays and disruption. In 2020, 74 of the F-35s were delivered to the US military, 31 to international partner nations and 18 to foreign military sales customers.

Looking ahead, the security and aerospace company expects COVID-19 to have short-term impacts on the production of the F-35 program. At the same time, the company said that it is on track to meet joint government and industry recovery commitments over the coming years.

“The F-35 joint enterprise team rapidly responded to the challenges of the COVID-19 pandemic to continue to deliver the unmatched combat capability the F-35 brings to the Warfighter,” said Bill Brotherton, general manager of the F-35 program. “Achieving this milestone amid a global pandemic is a testament to the hard work and dedication of the team and their commitment to our customers’ missions.”

LMT shares, which have recovered since hitting a low earlier this year, are still trading down 9% since the start of 2020. Looking ahead, the average analyst price target stands at $414.80 and implies 17% upside potential lies ahead over the coming year.

Earlier this month, Lockheed Martin proposed to buy US rocket engine manufacturer Aerojet Rocketdyne Holdings for $4.4 billion including the assumption of net cash, in a move to expand its warfare and space technology offerings.

Commenting on the deal, Cowen & Co. analyst Cai Rumohr reiterated a Buy rating on the stock and added that while only modestly accretive, it is a good strategic fit.

“We think the deal will likely displease key officials in Biden’s DoD [Department of Defense] but they may not block it due to the limited overlap,” Cowen analysts wrote in a note to investors. “Lockheed’s competitors will grouse, but the approval of Northrop Grumman’s Orbital ATK acquisition sets up a workable framework.”

The rest of the Street is sidelined on the stock with a Hold analyst consensus. That’s based on Cowen’s recent Buy rating versus 4 Hold ratings. (See Lockheed’s stock analysis on TipRanks)