Lockheed Martin Eyes €1B+ European Missile Defence Market: EPS & Stock Implications
1. Lockheed Martin Targets European Missile Defence Market
1.1. U.S. defence giant Lockheed Martin is marketing its THAAD missile defence system to European buyers.
1.2. Each THAAD system costs over €1 billion ($1.17 billion).
1.3. Talks are ongoing with multiple potential European customers amid rising defence budgets.
2. THAAD and the European Skyshield Initiative
2.1. THAAD could join Germany-led European Skyshield Initiative as an alternative to Israel’s Arrow 3.
2.2. Skyshield aims to enhance continental missile and air-defence capabilities.
2.3. Offers Europe a strategic diversification in defence procurement.
3. Surge in European Defence Spending
3.1. Since Russia’s Ukraine invasion (2022), European nations have dramatically increased defence budgets.
3.2. Germany plans €100B+ in military investments, including missile systems.
3.3. Poland and Denmark are also investing billions in drones, air defence, and missile systems.
📊 European Defence Spending Snapshot
| Country | Planned Spend (Post-2022) | Focus Areas |
|---|---|---|
| Germany | €100B+ | Missile & air defence |
| Poland | €20B+ | Drones, missile systems |
| Denmark | €11B+ | NATO air & drone defence |
4. Rising Drone Threats
4.1. Suspected Russian drones have entered NATO airspace (Denmark, Poland).
4.2. This accelerates procurement of missile and drone defence systems.
4.3. U.S. contractors like Lockheed Martin and Northrop Grumman see strong opportunities.
5. Strategic Partnerships
5.1. Lockheed’s Rheinmetall partnership strengthens its chances in Germany:
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Creates jobs locally.
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Opens access to political decision-makers.
5.2. Europe is a key growth market outside the U.S. over the next five years.
6. European Preference for Domestic Systems
6.1. Some nations avoid U.S. systems to reduce dependence.
6.2. Example: Denmark rejected the Patriot system, opting for SAMP/T (Europe-made).
6.3. Procurement decisions balance cost, geopolitics, and strategic autonomy.
7. THAAD Market & Financial Highlights
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Each THAAD system: €1B+ ($1.17B)
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European defence market: hundreds of billions in planned investments
📊 System Cost Comparison
| System | Origin | Approx. Cost | Adopted By |
|---|---|---|---|
| THAAD | U.S. | €1B+ | Under talks |
| Arrow 3 | Israel | €3B | Germany |
| Patriot | U.S. | €1B+ | NATO states |
| SAMP/T | Europe | €0.5–0.8B | Denmark |
8. Lockheed Martin Stock & Financial Overview
| Metric | Value | Notes |
|---|---|---|
| Market Cap | ~$113B USD | Sept 2025 |
| Stock Price | ~$487–$490 USD | NYSE |
| Revenue (2024) | $71.04B USD | +5.14% YoY |
| Net Income (2024) | $5.34B USD | −22.9% YoY |
| P/E Ratio | ~27.6× | Trailing 12 months |
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Q2 2025 profits dropped ~80% to $342M due to pre-tax charges in classified projects and international helicopter programs.
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Full-year EPS guidance revised $21.70–$22.00 (previous $27–$27.3).
9. THAAD Contracts Impact on EPS
| THAAD Contracts | EPS Boost ($) | Projected EPS ($) |
|---|---|---|
| 1 | 0.56 | 22.41 |
| 3 | 1.68 | 23.53 |
| 5 | 2.81 | 24.66 |
Assumptions: $1.17B per contract, 12% gross margin, 250M shares outstanding.
10. Stock Price Projection with THAAD Contracts
| THAAD Contracts | Projected Stock Price ($) |
|---|---|
| 1 | 618.52 |
| 3 | 649.43 |
| 5 | 680.62 |
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Assumes constant P/E = 27.6×.
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Highlights potential stock upside if European contracts are secured.
11. Combined Financial Snapshot
| THAAD Contracts | EPS Boost ($) | Projected EPS ($) | Projected Stock Price ($) | Additional Revenue ($B) | Potential Gross Profit ($B) |
|---|---|---|---|---|---|
| 0 | 0 | 21.85 | 602.46 | 0 | 0 |
| 1 | 0.56 | 22.41 | 618.52 | 1.17 | 0.14 |
| 3 | 1.68 | 23.53 | 649.43 | 3.51 | 0.42 |
| 5 | 2.81 | 24.66 | 680.62 | 5.85 | 0.70 |
12. Investor Takeaways
12.1. Lockheed Martin faces profit declines and EPS cuts, but European THAAD contracts provide upside.
12.2. Potential EPS and stock price gains are significant if contracts are secured.
12.3. Investors should weigh execution risk, geopolitical factors, and long-term revenue potential.
Disclaimer
This article is for informational and analytical purposes only. It does not constitute investment advice. The Profit India is not liable for financial actions taken based on this report. Please consult a qualified financial adviser before making investment decisions.
