Lockheed Stock Rises Despite Downgrade. It’s Losing Wall Street Support.

Lockheed Martin stock took a hit when Tesla CEO Elon Musk criticized manned fighter jets in November. Above, an Air Force B-2 Spirit stealth bomber, flanked by two F-22 Raptor fighter jets, flies over Washington, D.C., on July 4. (MEHMET ESER/Middle East Images/AFP via Getty Images)

Lockheed Martin shook off early losses, rising on Thursday despite catching a Wall Street downgrade.

TD Cowen analyst Gautam Khanna downgraded shares of the defense contractor to Hold from Buy, citing uncertainty about prospects for its F-35 jet under the second Trump administration and “fairly persistent execution challenges.” He trimmed his price target to $480 from $500 a share.

Lockheed’s loss of the F-47 sixth-generation fighter jet program to Boeing —announced in March—will result in some additional expenses, he said, adding there have been “cost overruns on a classified aero program.”

The company didn’t respond to a request for comment. Companies don’t typically comment on ratings actions by analysts.

Shares of the defense company traded as low as $456 but rallied to close up 0.3% at $464.31. The S&P 500 and Dow Jones Industrial Average gained 0.3% and 0.4%, respectively.

Lockheed stock has had a rough time over the past few months. Coming into Thursday trading, Lockheed stock was down about 5% year to date and had fallen about 11% since Nov. 24. That is the day that Tesla CEO Elon Musk criticized manned fighter jets on X. He believes unmanned fighters are the future.

The Defense Department, and the defense industry, including Lockheed, are working on unmanned jets. Manned fighters still play a critical role as recent raids by Israel and the U.S. against Iran demonstrate. Still, the criticism has weighed on Lockheed shares.

In early November, Lockheed stock traded for about 19 times the earnings per share expected for the coming 12 months. Now, it trades for about 16 times.

Overall, 40% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%, according to FactSet. The average analyst price target for Lockheed shares is about $523.

At the start of the year, closer to 50% of analysts rated shares Buy and the average target price was more than $600 a share. Wall Street sentiment has been slipping.

Lockheed will have a chance to reverse that trend when it reports its second-quarter earnings on July 22. Wall Street is looking for earnings per share of about $6.59, down from $7.11 reported in 2024.

Analysts will also be looking for an update to management’s financial guidance. The company has said it expects full-year EPS to land between $27 and $27.30 a share.

Write to Al Root at allen.root@dowjones.com