DailyPlay – Opening Trade (LMT) – October 28, 2025

LMT Bullish Opening Trade Signal

Investment Rationale

Investment Thesis
Lockheed Martin Corp. (LMT) remains a core beneficiary of escalating global defense spending, supported by ongoing geopolitical instability and rising commitments to military modernization among NATO and allied nations. The company’s strong Q3 results Third Quarter 2025 earnings report on October 21st, featuring revenue of $18.6 billion and an upward revision in full-year EPS guidance to $22.15–$22.35, reaffirm confidence in its resilient order book and execution strength. With a diversified defense portfolio spanning aeronautics, missiles, and space systems, LMT offers a compelling long-term value opportunity as defense budgets continue to expand globally.

Technical Analysis
After rallying on Q3 earnings, LMT reclaimed its 50-day moving average near $478, which now serves as a solid support level. The 50-day recently crossed above the 200-day, underscoring renewed bullish momentum. With RSI sitting midrange at 46, the setup leaves room for further upside.  Current trading behavior suggests steady accumulation and improving performance relative to the S&P 500.

Fundamental Analysis
LMT trades at a steep valuation discount relative to its industry peers despite superior earnings growth expectations. The company’s long-term contracts, strong free cash flow generation, and elevated backlog position it well for sustained dividend growth and share repurchases. Continued global demand for air defense and tactical systems should underpin top-line expansion through 2026.

• Forward PE Ratio: 16.63x vs. Industry Median 33.85x
• Expected EPS Growth: 32.80% vs. Industry Median 12.30%
• Expected Revenue Growth: 4.29% vs. Industry Median 9.54%
• Net Margins: 5.73% vs. Industry Median 7.94%

Options Trade
Sell to Open 1 LMT Dec 5, 2025 485/470 Put Vertical @ $6.70 Credit. This bullish put vertical spread involves selling the 485 strike put and buying the 470 strike put to collect a net credit of $670, defining a maximum risk of $830. The setup offers a favorable risk/reward profile of approximately 0.8:1, with a breakeven point at $478.30. The position benefits from time decay and stable or rising prices, allowing for full profit potential if LMT remains above $485 through expiration. Given the stock’s constructive technical outlook and supportive fundamentals, this spread represents a high-probability income trade that aligns with continued strength into year-end.

LMT – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 2 LMT Dec 05 $485/$470 Put Vertical Spreads @ $6.70 Credit per Contract.

Total Risk: This trade has a max risk of $1,660 (2 Contracts x $830) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $830 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Mildly Bearish/Bullish

Relative Strength: 3/10

OptionsPlay Score: 110

Stop Loss: @ $13.40 (100% loss to value of premium)

View LMT Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

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