Lockheed Martin (LMT)

The sleeper story is that Aero's guidance was quietly CUT this quarter because the next F-35 lot award slipped a full year to 2027, even as the company trumpets another raise driven by MFC strength. The obvious headline, record $292B backlog and 4.0x book-to-bill, is real but heavily concentrated in one PAC-3 award worth up to $58.6B, not evidence of broad-based demand acceleration. The binding constraint here isn't customer demand, which management insists is permanent and bipartisan, it's the speed at which DoD can definitize HOA framework agreements into priced, multiyear contracts, a process Evan Scott still describes as merely 'well underway' a full quarter after it was first flagged as pending. Add in a one-time RMS margin benefit, a fading tax tailwind self-disclosed by management, a vanished CapEx guidance range, and a >$1B 2027 pension bill with no funding decision yet, and this is a good quarter dressed slightly better than it actually was. My view changes if management reinstates full-year CapEx guidance next quarter and gives a firm signing date for HOA-to-multiyear conversion; until then, I'd trim exposure to the backlog-acceleration narrative and watch Aero closely for a second consecutive guide-down.