Lockheed Martin: A Huge F-35 Cash Blow?

Summary

• Lockheed Martin restarted F-35 deliveries in July after a year-long pause due to TR-3 upgrade issues, building significant inventory during the halt.
• The TR-3 upgrade enhances the F-35's memory, processing power, and combat capabilities, but current deliveries lack the full combat-ready upgrade, delaying full payments.
• Delayed delivery payments for 2024 and 2025 could total $1.125 billion to $1.175 billion, impacting cash flow but minimally affecting Lockheed Martin's stock price.
• Despite potential cash flow pressures, the impact on price targets is minor, and I remain confident in my buy rating and stock price targets for Lockheed Martin.