Over the last several years, Lockheed Martin (NYSE: LMT) has either been a big winner or loser depending on the time frame you’re looking at.
In the past five years, the stock is up around 84% – far outpacing the S&P 500’s gain of 48% over the same period. But if you look at the last twelve months, the stock is down around -11%.
But one technical analyst sees a rebound on the horizon after a rough year for the defense stock.
“It’s been a bit of an underperformer in the defense sector, but we’re seeing signs on the charts here, on the technical position, that we could be in for a little bit of a comeback rally,” said TradingAnalysis.com’s Todd Gordon on CNBC on Tuesday.
According to Gordon, LMT has been in the middle of a three-wave correction, tumbling from its peak in February 2018 then climbing up from its mid-year low, and then falling hard and bottoming-out in December. After all that, Gordon now sees the set-up for a rally.
“I like the formation of this chart just with this little move right here,” Gordon said. “We’ve got a nice push up here from $240. We’ve fallen into a little bit of a bull flag here, a little bit of a consolidation.”
Since hitting its bottom on December 26, the stock has surged 24% and is now sitting between its 200-day and 50-day moving averages.
“It looks like should the broader market continue, we should be able to pierce up through that 200-day moving average,” Gordon said. “Now the upside target here is we should be looking for this old high just around $350 a share.”
If the stock bounces back to $350, it would represent a rally of nearly 17% from current prices and would be just 4% below its record high.
The average analyst price target for LMT is $348.93, indicating possible upside of 16.44%, which is in-line with Gordon’s projection. Bank of America recently reiterated their Buy rating on the stock and issued a twelve month price target of $390 – 30% higher than current prices.