Analyst Note| Burkett Huey, CFA |
Wide-moat-rated Lockheed Martin reported a solid second quarter aside from a $225 million charge on a classified aeronautics program. Management maintained its top- and bottom-line guidance and repurchased another $500 million of stock on top of the $1 billion it repurchased in the first quarter. We are decreasing our fair value estimate to $425 per share from $436 as we incorporate Morningstar’s assumption of higher taxes in our model, but we still think the stock is somewhat undervalued. We think the significant repurchases show that management agrees with our assessment that the stock is cheap.