Morgan Stanley Upgrades Lockheed Martin to Buy With $835 Target After F-35 Framework Deal and Record $292B Backlog

Morgan Stanley upgraded Lockheed Martin to Overweight from Equal-weight on Monday and raised its price target to $835 from $690, implying roughly 38% upside from Friday's close, citing a newly announced 10-year framework agreement between Lockheed and the U.S. Department of Defense to produce and support at least 850 F-35 Lightning II stealth fighters at an annual rate of 156 aircraft. Analyst Kristine Liwag said the deal removes a key overhang: investors had feared the F-35 program, which accounts for 20% to 30% of Lockheed's revenue, could be cut to fund missile expansion. Liwag said the announcement "effectively removes this risk from the stock" and supports the F-35's role in U.S. and allied air dominance.

Bank of America also raised its price target on the stock, to $620 from $600, citing a strong outlook, though the firm flagged potential cash flow risks. Jefferies separately lifted its target to $615 from $595. The upgrades and target increases follow Lockheed's strong third-quarter 2026 results, which included a record $292 billion backlog. Key segments, including Aeronautics and Missiles and Fire Control, posted significant profit growth in the first nine months of the year, with mid-teens growth in the Missiles and Fire Control unit.

Shares of Lockheed rose sharply on the news, with the stock up roughly 9.6% following its earnings beat before additional gains on Monday's analyst action. The moves put several defense-focused ETFs with significant Lockheed exposure in focus as well. Lockheed also featured in CNBC's "Halftime Report Final Trades" session, reflecting the stock's broad prominence across Wall Street commentary for the day.