Moody’s changes Lockheed Martin to positive

Moody's Investors Service said it affirmed its ratings for Lockheed Martin Corp. and subsidiaries, including the Baa1 senior unsecured and P-2 short-term debt ratings.

The outlook was revised to positive from stable.

Moody’s said the outlook change reflects its expectation that Lockheed Martin's credit profile will improve over the forward rating horizon, as the company benefits from: (a) A comparatively protected position as the prime contractor on one of the few growing defense programs—the F-35 Lightning II—and Moody's view that the risk profile of that program has reduced; and (b) a growing amount of cash flow likely over time related to the recovery of previously funded pension expenses from its principal government customer, another key differentiating factor in the broader context of its immediate peer group.

Combined with anticipated strong execution as recently demonstrated on major programs and a measured approach to shareholder return initiatives, Moody’s said the prospect of an upgrade in the company's long-term senior unsecured debt rating to A3 being warranted over the coming 12 to 18 months is subsequently deemed to be elevated, as reflected in the rating outlook revision to positive.

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