Will Lockheed Martin Stock Rebound?
In the latest installment of Twitter bombs dropped by the incoming president, Donald Trump has fired a shot across the Lockheed Martin Corporation (NYSE:LMT) bow, sending Lockheed Martin stock down 2.4% after tweeting that he’s now asked Boeing Co (NYSE:BA) to compete for a government contract to build fighter jets.
The Lockheed Martin stock versus Boeing stock has, as one would expect, benefited BA over LMT. Boeing stock saw a near 0.5% rise in pre-trading.
Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!
— Donald J. Trump (@realDonaldTrump) December 22, 2016
“We have committed to working with the president-elect and his administration to provide the best capability, deliverability and affordability across all Boeing products and services to meet our national security needs,” Boeing told CNBC in a statement. (Source: “Lockheed Martin shares take another tumble after Trump tweet,” CNBC, December 23, 2016.)
This is not uncharted territory for President-elect Trump, or for Boeing for that matter. In a similarly aeronautical-themed attack, Trump threatened to cancel the order for a new Air Force One from Boeing due to what the president-elect saw as being overly expensive. The comment hurt the stock of Boeing, but after a meeting between the CEO and Trump, the deal was reinstated, though Boeing claimed to be producing the plane at a cheaper price.
This isn’t even Trump’s first criticism of the “F-35.” He’s commented on the much-discussed fighter jet before, which sent Lockheed Martin stock down and ended up costing the company as much as $4.0 billion in market value.
This seems to be the new modus operandi for the Deal-Maker-in-Chief, with tweets being his preferred way to settle government dealings.
Trump met with the CEOs of both companies at his Mar-a-Lago resort in Florida on Wednesday. After the meeting, Lockheed Martin CEO Marillyn Hewson said she “appreciated the opportunity to discuss the importance of the F-35 program and the progress we’ve made in bringing the costs down.” (Source: Ibid.)
I wonder if her tune has changed any after this recent tweet-strike?