People tend to ignore public finance because it seems more complex than personal finance, but in reality it is the same. It is nothing but books of income, expenses, debts and assets. Once this fact is accepted, investors can make investment decisions based on where these accounts are located and how they impact the broader market and industries. Today’s issue therefore represents the entire government debt.
The problem is not the $36 trillion in debt, but the amount of interest generated by that debt level, which has now peaked at $1.1 trillion. The problem with these interest costs is that they have now exceeded the national defense budget, which is like saying that someone’s credit card interest costs exceed their home insurance payments.
This is not a great situation and the last time this happened was in the 1990s, leading to inevitable expansion. That’s why defense and aerospace stocks like Lockheed Martin Co. New York Stock Exchange: LMT, Northrop Grumman Co. New York Stock Exchange: NOCand even Boeing Company New York Stock Exchange: BA. They all have the same tailwinds, but could offer investors different upside potential in the coming months.
Lockheed Martin Stock Pullback: Low-Risk Opportunity
After a very favorable run in equities amid rising geopolitical tensions over the last two quarters, the conflict premium appears to have eased. Now, Lockheed Martin shares are down to just 73% of their 52-week high price. While this may scare off some investors and traders, others will see it as an opportunity.
Lockheed Martin Stock Forecast Today
$591.21
Growth potential 26.37%Moderate purchase
Based on ratings from 14 analysts
| High forecast | $704.00 |
|---|---|
| Average forecast | $591.21 |
| Low forecast | $377.00 |
Lockheed Martin stock forecast details
For example, Geode Capital Management decided to increase its stake in Lockheed Martin shares by 1.8% as of November 2024, bringing its position today to a maximum of $2.8 billion, or 2% ownership in the company. New institutional buying could be a sign of a potentially attractive situation in stocks today, and it doesn’t end there.
Wall Street analysts still have a consensus price target of $591.2 for Lockheed Martin shares, suggesting upside potential of up to 26.2% from today’s levels. It’s important for investors to remember this because analysts don’t often risk their careers and reputations by promoting stocks that have recently fallen, so the thesis needs to be alive today.
This thesis could come from a potentially larger defense budget that would have to be distributed among the nation’s top defense companies, of which Lockheed Martin has 13.5% of the market and Boeing only 13.9%.
Insiders like the discount on Northrop Grumman shares
A story that rhymes with Lockheed Martin’s price action: Northrop Grumman stock was a defense darling two quarters ago, but is now down to just 76% of its 52-week high. Given that the company is currently in bear market territory, not many analysts (or buyers) should be excited about the company’s prospects.
Northrop Grumman stock forecast today
$551.40
Growth potential 20.30%Hold
Based on ratings from 15 analysts
| High forecast | $643.00 |
|---|---|
| Average forecast | $551.40 |
| Low forecast | $477.00 |
Northrop Grumman Stock Forecast Details
However, those who understand the implications for the defense budget today and its potential increases tomorrow will realize that the future of this stock has plenty of upside potential. Wells Fargo representatives know this and are not afraid to make their optimistic views public.
As of January 2025, these analysts view the stock as Overweight, this time with a valuation of $595 per share. To prove these new targets right, Northrop Grumman stock would have to rise to 28.5% from where it trades today, another double-digit growth opportunity for investors to consider in the industry.
However, these analysts weren’t the only ones looking at a higher ceiling for the stock. Management recently increased the company’s share repurchase program to $4.2 billion, or roughly 6% of its market capitalization. Such an aggressive buyback program would indicate that insiders believe the shares are cheap enough to buy today, and investors should take this into account.
Boeing’s reversal: what investors are counting on
Wall Street analysts are confident in forecasting Boeing’s earnings per share (EPS) over the next 12 months. Based on today’s net loss of $10.44 per share, these analysts believe the company could reach as low as a $0.42 net loss per share for the trailing 12 months. A bold forecast, but not far from the realities presented today.
Boeing stock forecast today
$192.21
Growth potential 11.70%Moderate purchase
Based on ratings from 23 analysts
| High forecast | US$250.00 |
|---|---|
| Average forecast | $192.21 |
| Low forecast | $85.00 |
Boeing stock forecast details
Boeing is exposed to the risk of a higher defense budget and bullish tailwinds in the broader transportation sector. There are several reasons why analysts have recently upgraded some airline stocks. Moreover, China has decided to make Boeing its main supplier of commercial aircraft in the coming years.
With some of the best investors viewing China as a beast waiting to be awakened, Boeing is predicting strong growth for the country’s tourism industry and they will be ready to meet it. That’s why Deutsche Bank analysts have decided to maintain a Buy rating as of January 2025 and raise their estimate to $215 per share, implying 25% upside potential for the stock.
This massive EPS turnaround also prompted State Street officials to buy an additional 2.3% stake in Boeing, with a net position of $4.2 billion today, or 4.5% ownership in the company.
Before you consider Northrop Grumman, you might want to hear this.
MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Northrop Grumman wasn’t on the list.
While Northrop Grumman currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Strong Buys.
View five stocks here
Looking to roll over your 401K or Roth IRA? Use these time-tested investment strategies to increase the monthly retirement income your stock portfolio generates.
Get this free report