Lockheed Martin Corporation (NYSE: LMT)
Company Overview
Lockheed Martin just received a major vote of confidence from the U.S. Department of Defense with a $7.3 billion contract modification awarded on January 16, 2026—less than two weeks ago. The contract covers production and delivery of F-35 Lightning II Joint Strike Fighter aircraft for the U.S. Air Force, Marine Corps, Navy, and international partners including Finland, Germany, and Belgium. This brings Lockheed’s total F-35 contract value to well over $400 billion across the program’s lifetime.
What makes this particularly compelling is the timing and scale. The $7.3 billion award represents continued strong international demand for the F-35, with European allies rapidly expanding their fleets amid heightened security concerns. The contract includes production work across multiple states—Texas, California, and Maryland—demonstrating the program’s economic impact. With global defense budgets increasing and the F-35 establishing itself as the fighter of choice for U.S. allies, Lockheed’s order backlog continues growing even as it ramps production.
Key Technical and Fundamental Drivers
Major Contract Award → $7.3B on January 16th
The Pentagon awarded Lockheed a $7.3 billion contract modification on January 16, 2026, for F-35 production and delivery to U.S. forces and international partners including Finland, Germany, and Belgium.
International Demand Surge → European Expansion
European allies are accelerating F-35 orders amid heightened security environment, with Finland, Germany, and Belgium among the latest customers driving international sales growth.
Record Backlog → $160B Total Orders
Lockheed’s total backlog stands at approximately $160 billion, providing multi-year revenue visibility and demonstrating sustained demand across its defense portfolio.
Production Ramp → 156 Aircraft Target
The company is ramping F-35 production toward its target of 156-170 aircraft annually, with each percentage point increase in production driving significant margin expansion.
Dividend Aristocrat → 22 Years Growth
Lockheed has increased its dividend for 22 consecutive years with a current yield around 2.5%, appealing to income investors seeking defense sector stability.
Market Takeaway
Lockheed Martin’s $7.3 billion contract award from January 16th underscores the sustained momentum in global defense spending that’s benefiting the entire sector. The F-35 program has evolved from a controversial development project into a proven production cash machine, with international orders providing a growing revenue stream that diversifies beyond U.S. military budgets. The inclusion of Finland, Germany, and Belgium in this latest contract highlights how European nations are urgently modernizing their air forces.
The company’s $160 billion backlog provides exceptional revenue visibility in an uncertain economic environment, making defense stocks like Lockheed attractive for investors seeking predictability. As production ramps toward 156-170 aircraft annually, operating leverage should drive margin expansion—every additional plane produced reduces per-unit costs. With geopolitical tensions remaining elevated and defense budgets increasing globally, Lockheed is positioned to benefit from a multi-year upgrade cycle. The 2.5% dividend yield and 22-year growth streak add income appeal to what’s fundamentally a growth story driven by international F-35 demand. Traders should watch for any Q4 2025 earnings announcements in late January, which could provide updated guidance on production rates and international order momentum.