Shares of Lockheed Martin (NYSE:LMT) surged by 3.63% during mid-day trading on October 1, reaching an intraday high of $606.57 before closing at $605.80, up from its previous close of $584.58.
This puts the stock just 0.13% below its 52-week high of $606.57 and 53.85% above its 52-week low of $393.77. The trading volume was 883,991 shares, close to the average daily volume of 966,641 shares.
According to 20 analysts, the average one-year price target for Lockheed Martin (NYSE:LMT) is $546.96, with estimates ranging from a high of $635.00 to a low of $405.00. This average target price implies a downside of 9.71% from its current price of $605.80.
Lockheed Martin (NYSE:LMT)’s stock is currently rated as “Outperform” based on a consensus recommendation of 2.3 from 24 brokerage firms, using a scale where 1 signifies Strong Buy and 5 denotes Sell.
Analyzing Lockheed Martin’s Debt and Financial Health
Lockheed Martin (NYSE:LMT)’s recent balance sheet reveals it has significant liabilities, with $18.5 billion due within 12 months and $30.4 billion due beyond that period. In contrast, the company holds $2.52 billion in cash and $16.8 billion in receivables due within a year.
This leaves Lockheed Martin (NYSE:LMT) with net liabilities of $29.5 billion, which, while substantial, isn’t overly concerning given its large market capitalization of $138.8 billion. This means the company could raise capital if necessary to strengthen its balance sheet.
However, it’s important to monitor whether the company’s debt levels are becoming too risky. To assess how well a company can manage its debt, we look at two key ratios: net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) and interest cover (EBIT divided by interest expenses).
Lockheed Martin (NYSE:LMT)’s net debt is 1.6 times its EBITDA, which indicates a responsible use of debt. Furthermore, its EBIT (earnings before interest and taxes) is 8.9 times its interest expenses, showing that the company can comfortably meet its debt obligations.
However, Lockheed Martin (NYSE:LMT)’s EBIT declined by 2.3% last year. If this trend continues, it could make managing its debt more difficult over time. While analyzing debt, the focus should be on the company’s balance sheet, but future earnings are also critical in determining how well it can maintain financial health.
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