Lockheed Martin has added another 5% in the past week to close at $535.38 — but options traders are the most defensively positioned they've been in almost a year, and Q2 earnings arrive on July 21.
The options market tells the clearest story this week. The put/call ratio has climbed to 0.83, nearly 1.9 standard deviations above its 20-day average of 0.67. That's the highest reading of the past 52 weeks, outside only a single data point at 0.86. The shift is abrupt: for most of June the PCR sat comfortably in the 0.55–0.62 range. The jump in downside protection demand comes even as the stock itself has been rallying — that divergence between price strength and hedging activity is worth noting ahead of a print that has historically not been kind. Q1 earnings on April 23 produced a 7.6% single-day drop and a 6.7% five-day loss. The only other recent reaction data point, from May 12, was a mild +1.5%. With two data points working against each other, the options market appears to be pricing in the Q1 experience rather than the Q2 one.
Short interest and the lending market tell a far quieter story. SI has risen roughly 27% over the past month in absolute share terms — notable on paper — but at just 1.4% of the free float, it remains low. Borrow is cheap and getting slightly more expensive: cost to borrow edged up 20% on the week to 0.51%, though that figure is still near the low end of its six-month range and well below the 0.56% peak recorded in early June. Availability is essentially unlimited, with over 159 million shares available to borrow. There is no squeeze dynamic, no borrow stress, and no signal from the short book that institutional bears are making a directional bet. The caution lives entirely in the options market.
The Street picture is more constructive than it was a month ago, though still far from uniformly bullish. Citi's upgrade to Buy on July 1 — covered in the previous note — remains the most recent rating action, and the consensus mean target of $615.74 implies roughly 15% upside from current levels. However, the stock's 15% gap to that target mostly reflects the cluster of hold-rated analysts who trimmed targets aggressively after April's Q1 selloff; the bullish outliers (Susquehanna at $700) skew the mean. On valuation, LMT trades at a P/E of 16.5x and an EV/EBITDA of 11.8x — both of which have drifted lower over the past 30 days as the stock recovered more slowly than multiples contracted. The dividend score ranks in the 95th percentile, and the forward EPS growth score sits at the 78th — both supporting the stability-first bull case. EPS momentum over the nearer 30-day window, however, ranks only in the 27th percentile, which aligns with the Street's more selective posture on near-term estimate revision.
Among close defense peers, NOC gained 10.7% on the week and DRS rose 11.0% — both outpacing LMT's 5.1% move. RTX added 7.2% and GD gained 7.6%. The whole sector appears to be riding a defense-spending tailwind, but LMT is capturing it at a more measured pace, which may partly reflect the residual caution from April's earnings miss still sitting in institutional memories.
With July 21 now less than two weeks away, the key watch item is whether the put hedging that has built up this week gets worked off into the print or intensifies further — and whether the consensus's $615 target, sitting nearly 15% above the current price, gives the Street room to revise higher if execution improves.
See the live data behind this article on ORTEX.
Open LMT on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
