The wars in Ukraine and West Asia are reshaping the outlook for the global defence industry, with Lockheed Martin and RTX raising their 2026 financial forecasts as the Pentagon accelerates efforts to replenish depleted weapons stockpiles.
Lockheed Martin and RTX shares surged after both US defence giants raised their 2026 financial forecasts, citing robust demand as the Pentagon accelerates weapons replenishment.
Lockheed Martin stock climbed as much as 12.1% to an intraday high of $576 from its previous close of $514 before trading around $559, up 8.8%. RTX shares jumped as much as 9.6% to $213.50 from $194.88 before easing to around $209, still up 7.3%.
Pentagon Restocking Drives Demand
The improved outlook comes as the US government ramps up defence procurement following years of heavy weapons usage in Ukraine and the recent US-Iran conflict.
According to Pentagon data, the United States has used more than 50,000 rockets, missiles and rocket-propelled munitions since the Russia-Ukraine war began in 2022 and during military operations against Iran.
President Donald Trump has also called on defence manufacturers to increase production capacity while proposing a record $1.5 trillion military budget for fiscal 2027. The US House of Representatives has already passed its version of a defence policy bill authorising $1.15 trillion in military spending.
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Lockheed Sees Record Backlog
Lockheed Martin reported strong growth in its missile business as demand for advanced defence systems continued to rise.
Revenue from its Missiles and Fire Control division climbed nearly 20% year-on-year to $4.1 billion, driven by increased production of PAC-3 missiles, Precision Strike Missiles and THAAD missile interceptors.
The company recently secured a $35 billion US government contract to quadruple THAAD interceptor production, further strengthening its long-term order pipeline.
Its total backlog expanded 38.3% to $230.4 billion from $166.5 billion a year earlier, reflecting robust demand from both domestic and international customers.
Chief Executive Jim Taiclet said the US government is providing greater flexibility to help accelerate production.
"The government is giving us a lot more flexibility than they traditionally would have done... so that we can be faster," Taiclet said during the company's post-earnings call.
Lockheed also expects additional production partnerships in Europe as governments across the region continue expanding defence spending. Chief Financial Officer Evan Scott told Reuters the company is actively exploring opportunities to scale manufacturing capacity through collaborations.
The company now expects 2026 revenue between $79.75 billion and $81.75 billion, up from its previous forecast of $77.5 billion to $80 billion.
RTX Benefits From Missile And Aerospace Demand
RTX also raised its full-year outlook after reporting strong momentum across both its defence and commercial aerospace businesses.
Its total backlog rose 22% year-on-year to $289 billion, including $119 billion in defence orders and $170 billion in commercial aerospace contracts.
Sales at Raytheon, RTX's defence division, increased 18% to $8.27 billion, supported by demand for Patriot, Standard and AMRAAM missile systems.
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Chief Financial Officer Neil Mitchill told Reuters that international customers accounted for roughly half of Raytheon's bookings during the first half of the year, with European nations contributing nearly $7 billion of the $10 billion total.
RTX now expects 2026 adjusted sales of $95 billion to $96 billion, compared with its earlier forecast of $92.5 billion to $93.5 billion. The company also raised its adjusted earnings guidance to $7.10-$7.25 per share from $6.70-$6.90 previously.
Defence Spending Cycle Gains Momentum
The upgraded forecasts from both companies suggest that rising geopolitical tensions are creating a sustained investment cycle in global defence.
As governments replenish missile inventories, modernise armed forces and expand military budgets, leading defence contractors are positioned to benefit from long-term demand. Continued orders from the United States, Europe and the Middle East indicate that the current defence spending cycle could extend well beyond 2026.
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