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Lockheed Martin: Module 4

Lockheed Martin: Module 4. Devin Sheehan. Lockheed Martin Background. Aeronautics (31.69% of Sales) F-22 Raptor, C-130 Hercules, U-2 Spy Plane Information Systems and Global Solutions (18.75% of Sales) Cyber Security and Battlefield Intel Missiles and Fire Control (15.80% of Sales)

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Lockheed Martin: Module 4

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  1. Lockheed Martin: Module 4 Devin Sheehan

  2. Lockheed Martin Background • Aeronautics (31.69%of Sales) • F-22 Raptor, C-130 Hercules, U-2 Spy Plane • Information Systems and Global Solutions (18.75%of Sales) • Cyber Security and Battlefield Intel • Missiles and Fire Control (15.80%of Sales) • HellFire Missile and Javelin Missile • Mission Systems and Training (16.06%of Sales) • Integrated Warfare Systems & Sensors (IWSS) • Space (17.69%of Sales) • commercial and military satellites, space probes, missile defense systems

  3. Lockheed Martin Background cont.

  4. Parsimonious – Revenues

  5. Parsimonious – Revenues Projected • Slow growth due to an international effort to balance government budgets. • In the long run, growth at pace with inflation. • Can quickly change with an increase in global conflict.

  6. Parsimonious – EPM (from Sales)

  7. Parsimonious – EPM (from Sales) Projected • Lockheed Martin is making efforts to expand margins. • But the cutting edge technology is expensive to buy and develop in the long run.

  8. Parsimonious – EATO

  9. Parsimonious – EATOProjected • Q4 Conference call: Lockheed is cutting 4,000 jobs and shutting down three facilities. • Therefore, higher projected EATO at 225 to 245% of sales.

  10. Multiyear Forecasts of Sales, EPAT and NEA • Sales grow at 1.5% through 2017 and 2.25% in perpetuity. • EPM 7% • EATO 225% in 2014, 245% 2015-onward

  11. Discounted Cash Flow Model

  12. Conclusion • Market Cap: 47.27B • DCF 8% discount rate: 40.46B • DCF 10% discount rate: 29.35B • DCF 12% discount rate: 23.00B • Close even with basic assumptions

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