Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTJoel SouthSat, June 13, 2026 at 2:30 PM GMT+2 5 min readQuick ReadLMT's $194 billion backlog spans 2.5 years of sales while NOC's B-21 flipped from a $183 million loss to $305 million in profit.RTX raised 2026 guidance after Q1 adjusted EPS beat consensus by 17%, making it the only one of the three primes to lift its full-year outlook.With $60 billion allocated to FY2027 munitions, execution rather than new orders will separate defense sector leaders as Washington rewires how it buys weapons.Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Lockheed Martin didn't make the cut. Grab the names FREE today.Defense contractors have spent the past year doing exactly what they are designed to do: Deliver predictable cash flow, lean on multi-year backlogs and reprice higher as geopolitical risk refuses to fade. With $52.9 billion earmarked for critical munitions in the FY 2027 Department of War budget request and defense ranked the standout ETF theme of 2025, the sector backdrop heading into mid-2026 favors scale, contract visibility, and production capacity.24/7 Wall St.Below are three names worth a closer look this month, each with a tool-verified data point grounding the thesis.Lockheed Martin: The Backlog AnchorLockheed Martin (NYSE:LMT) trades at $525.02 as of June 10, with shares up 10% year to date and 13% over the past year. The forward P/E sits at 17, the dividend yield at roughly 3% and the analyst target price stands at $625.16.The bull case rests on a record $194 billion backlog representing more than 2.5 years of sales and the recently signed multi-year framework agreements with the Department of War for Patriot, THAAD, and PrSM. CEO Jim Taiclet said the deals will "increase production rates of these critical systems by three to four times current rates," locking in demand against a budget environment that wants more munitions, faster. FY2026 guidance was reaffirmed at $77.5 billion to $80.0 billion in sales and diluted EPS of $29.35 to $30.25, with operating profit expected to grow approximately 25% year over year.The caveat is real. Q1 2026 EPS of $6.44 missed the $6.70 consensus, free cash flow turned negative at -$291 million, and a $125 million unfavorable F-16 charge reminded investors that fixed-price program risk has not gone away. The backlog buys patience; execution still needs to improve.Northrop Grumman: The B-21 InflectionNorthrop Grumman (NYSE:NOC) trades at $542.14, down 4% year to date but still up 13% over 12 months. Trailing P/E sits at 17, forward P/E at 20, and dividend yield at 2%. The analyst target of $696.95 implies meaningful upside, with four Strong Buys and 10 Buys against nine holds. Sentiment screens bullish at a composite score of 64.72.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info