VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Tuesday, December 30, 2025
Lockheed Martin Corporation
LMT · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Lockheed Martin is a U.S. aerospace and defense prime contractor with four reportable segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The moat is mostly government-procurement driven: long-standing DoD/allied relationships, program incumbency, and qualification-heavy platforms that are costly to replace once fielded. Aeronautics is anchored by the F-35 franchise and associated sustainment, while the other segments provide missiles/air defense, helicopters and mission systems, and national security space/strategic systems. Key pressures are shifting acquisition policies, execution risk on fixed-price work, and concentration/technical risk on a few very large programs.
Primary segment
Aeronautics
Market structure
Oligopoly
Market share
—
HHI: —
Coverage
4 segments · 9 tags
Updated 2025-12-29
Segments
Aeronautics
Military fixed-wing aircraft (fighters and air mobility) plus sustainment and upgrades
Revenue
40.3%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Missiles and Fire Control
Tactical missiles, precision strike, and integrated air & missile defense systems
Revenue
17.9%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Rotary and Mission Systems
Military helicopters, naval & land combat systems, C4ISR/cyber, training and logistics
Revenue
24.3%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Space
National security and civil space systems (satellites, strategic/missile defense/strike, and classified space programs)
Revenue
17.6%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Moat Claims
Aeronautics
Military fixed-wing aircraft (fighters and air mobility) plus sustainment and upgrades
Revenue share computed from FY2024 Form 10-K segment net sales table: Aeronautics $28.618B of total $71.043B. Segment operating profit $2.523B of total business segment operating profit $6.083B.
Design In Qualification
Demand
Design In Qualification
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Flagship aircraft platforms (notably F-35) have long production + modernization + sustainment lifecycles; once a platform is selected and fielded, replacement requires re-competition, certification, training, and logistics transition across fleets.
Erosion risks
- Budget cuts or re-phasing of fighter procurement
- Program performance/schedule issues reducing deliveries or sustainment volume
- Spend shifts toward next-generation platforms or unmanned systems
Leading indicators
- Annual F-35 deliveries and backlog trend
- DoD + international contract lots and funded orders
- Fleet availability and cost-per-flight-hour metrics
Counterarguments
- Future aircraft franchises can be recompeted; incumbency is not guaranteed
- Allies can diversify procurement across multiple fighter platforms in some roles
Service Field Network
Supply
Service Field Network
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Global sustainment, training, and upgrade capabilities for large installed fleets (e.g., F-35) support recurring revenue and create operational dependence for customers.
Erosion risks
- Government insourcing of depot maintenance or sustainment work
- Data-rights/right-to-repair policy changes enabling third-party sustainment
- Fleet drawdowns as platforms retire
Leading indicators
- Sustainment contract awards/renewals
- Aeronautics sustainment share of segment sales
- Customer readiness/availability KPIs
Counterarguments
- Sustainment can be recompeted and tightly price-controlled by the customer
- Modular architectures can lower maintenance switching costs over time
Government Contracting Relationships
Legal
Government Contracting Relationships
Strength: 4/5 · Durability: durable · Confidence: 5/5 · 1 evidence
Defense primes with proven past performance, cleared facilities, and contracting infrastructure are advantaged in winning and retaining U.S. and allied government programs.
Erosion risks
- Procurement reforms favoring non-traditional contractors (e.g., OTAs)
- Bid protests or award reversals
- Geopolitical restrictions/sanctions limiting certain exports
Leading indicators
- Recompete win rate and major program awards
- DoD budget priorities and acquisition policy changes
- Regulatory enforcement actions affecting eligibility
Counterarguments
- The government can shift awards to preserve a broader industrial base
- High program scrutiny can cap margins and increase contractual risk-shifting
Missiles and Fire Control
Tactical missiles, precision strike, and integrated air & missile defense systems
Revenue share computed from FY2024 Form 10-K segment net sales table: MFC $12.682B of total $71.043B. Segment operating profit $0.413B of total business segment operating profit $6.083B (impacted by classified program losses disclosed in FY2024 results).
Design In Qualification
Demand
Design In Qualification
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Missile and integrated air/missile defense programs require long qualification cycles, platform/system integration, and export approvals; once fielded, upgrades and replenishment tend to follow multi-year procurement patterns.
Erosion risks
- Rapid technology shifts (e.g., counter-hypersonic, directed energy) changing procurement mixes
- Program execution issues (cost/schedule) leading to recompetes or cancellations
- Export/license constraints and geopolitics limiting international demand
Leading indicators
- Multi-year procurement awards and option exercise cadence
- Delivery rates and funded backlog for major missile programs
- Unit cost and reliability metrics vs contract targets
Counterarguments
- Major programs can be dual-sourced or recompeted to sustain competition
- Government customers can pressure margins through negotiated pricing and audits
Capacity Moat
Supply
Capacity Moat
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
In periods of elevated munitions demand, existing qualified production lines, test capacity, and supplier relationships can create a near-term capacity moat versus slower-to-ramp competitors or new entrants.
Erosion risks
- Supply chain bottlenecks (motors, energetics, microelectronics)
- Competitors or government-funded entrants expanding capacity
- Demand normalization after surge procurement cycles
Leading indicators
- Lead times and on-time delivery rates
- Capital expenditure and supplier qualification milestones
- Booked orders vs funded capacity expansion
Counterarguments
- Capacity advantages can be temporary; governments can fund alternate suppliers
- Standardized munitions can commoditize, shifting competition to price and throughput
Government Contracting Relationships
Legal
Government Contracting Relationships
Strength: 4/5 · Durability: durable · Confidence: 5/5 · 1 evidence
Deep DoD/allied customer relationships and program incumbency support recurring orders, modifications, and sustainment on fielded munitions and defense systems.
Erosion risks
- Budget shifts away from specific munitions categories
- Policy-driven supplier diversification
- Sanctions/export constraints in certain regions
Leading indicators
- DoD procurement budget lines for missiles and air defense
- Contract wins and recompete retention
- International order flow (FMS notifications/awards)
Counterarguments
- Governments can mandate competition and second sources on critical munitions
- High scrutiny on cost growth can force margin give-backs or fixed-price risk
Rotary and Mission Systems
Military helicopters, naval & land combat systems, C4ISR/cyber, training and logistics
Revenue share computed from FY2024 Form 10-K segment net sales table: RMS $17.264B of total $71.043B. Segment operating profit $1.921B of total business segment operating profit $6.083B.
Service Field Network
Supply
Service Field Network
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Large installed bases (helicopters, ship combat systems) create recurring modernization, integration, and lifetime support opportunities where domain knowledge and field-service infrastructure matter.
Erosion risks
- Customer push to insource or compete sustainment/modernization work
- Fleet reductions or replacement programs moving to competing OEMs
- Cyber incidents or reliability issues damaging trust in mission systems
Leading indicators
- Modernization and sustainment awards on major combat systems
- Helicopter delivery + retrofit backlog trend
- Training/logistics contract renewals and win rates
Counterarguments
- Many support contracts are price-controlled and can be periodically recompeted
- Open architecture and common standards can reduce vendor lock-in over time
Design In Qualification
Demand
Design In Qualification
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Mission and combat systems are deeply integrated into ships and platforms; once selected for a ship class or helicopter fleet, replacement entails long recertification and integration cycles, favoring incumbents in modernization paths.
Erosion risks
- DoD shift toward modular, software-defined systems with more frequent vendor swaps
- Competitive displacement in next-generation ship/helicopter programs
- Integration delays or cost overruns eroding customer confidence
Leading indicators
- Share of modernization awards vs new-build awards
- Software release cadence and delivered capability milestones
- Bid activity/competitive intensity for next-gen combat systems
Counterarguments
- Program offices can mandate interoperability and open systems to reduce lock-in
- Competitors can win new ship classes even if incumbents keep legacy fleets
Space
National security and civil space systems (satellites, strategic/missile defense/strike, and classified space programs)
Revenue share computed from FY2024 Form 10-K segment net sales table: Space $12.479B of total $71.043B. Segment operating profit $1.226B of total business segment operating profit $6.083B.
Government Contracting Relationships
Legal
Government Contracting Relationships
Strength: 4/5 · Durability: durable · Confidence: 5/5 · 1 evidence
National security space and strategic programs are concentrated among a small set of trusted primes with long customer relationships, past performance, and cleared infrastructure.
Erosion risks
- Acquisition reform and faster procurement cycles increasing churn
- Competitors gaining share in proliferated LEO and resilient space architectures
- Budget volatility for large strategic programs
Leading indicators
- Major space program awards and recompete retention
- Backlog composition (classified vs unclassified; development vs production)
- Schedule adherence and mission success metrics
Counterarguments
- Government customers can diversify to multiple suppliers for resilience
- New entrants and commercial providers can win parts of the value chain
Design In Qualification
Demand
Design In Qualification
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Space and strategic systems have long development, integration, and certification cycles; once designs are selected and deployed, follow-on upgrades and blocks tend to stay with the incumbent integrator.
Erosion risks
- Program failures or launch anomalies leading to recompetes or oversight actions
- Shift toward modular, rapidly refreshable satellite buses reducing lock-in
- Supply chain constraints (radiation-hardened parts, propulsion, launch cadence)
Leading indicators
- Award cadence for next blocks/upgrades on major programs
- On-orbit performance and anomaly rates
- Schedule/cost variance disclosures on large programs
Counterarguments
- Commercial-style procurement can shorten cycles and reduce incumbent advantage
- Some satellite subsystems can be competed separately, lowering integrator capture
Compliance Advantage
Legal
Compliance Advantage
Strength: 3/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Security, export-control, and classified program requirements raise the bar for participation; maintaining cleared facilities, compliant processes, and trusted handling can exclude many would-be entrants.
Erosion risks
- Government broadening access via OTAs and commercial pathways
- Compliance failures (cyber, export control) leading to penalties or debarment
- Policy changes increasing transparency requirements for classified work
Leading indicators
- Cybersecurity compliance posture (e.g., CMMC readiness and audit outcomes)
- Frequency/severity of compliance findings and remedial actions
- Share of awards using commercial contracting vehicles
Counterarguments
- Compliance is necessary but not sufficient; performance and cost still drive awards
- Government may intentionally introduce new suppliers to spur innovation
Evidence
Production of the aircraft is expected to continue for many years.
Supports long-duration program lifecycle that creates embedded qualification and switching costs.
The filing discusses cumulative F-35 deliveries, remaining aircraft backlog, and international partner/FMS participation, consistent with a multi-decade installed base and follow-on sustainment demand.
sustainment, support and upgrade
The Aeronautics segment description emphasizes sustainment/support/upgrade work alongside manufacturing, consistent with a field-service moat on deployed fleets.
principal customers being agencies of the U.S. Government
The filing describes the U.S. Government as the principal customer and provides net sales mix by customer type.
MFC is described as providing air and missile defense systems and tactical missiles, implying integration into broader defense architectures and long program lifecycles.
Showing 5 of 13 sources.
Risks & Indicators
Erosion risks
- Budget cuts or re-phasing of fighter procurement
- Program performance/schedule issues reducing deliveries or sustainment volume
- Spend shifts toward next-generation platforms or unmanned systems
- Government insourcing of depot maintenance or sustainment work
- Data-rights/right-to-repair policy changes enabling third-party sustainment
- Fleet drawdowns as platforms retire
Leading indicators
- Annual F-35 deliveries and backlog trend
- DoD + international contract lots and funded orders
- Fleet availability and cost-per-flight-hour metrics
- Sustainment contract awards/renewals
- Aeronautics sustainment share of segment sales
- Customer readiness/availability KPIs
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
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