The market decided that the conflict around the Strait of Hormuz is nearly over. Military supplier stocks are dipping heavily in response. Investors believe that the U.S. will not expend any more missiles or other heavy artillery as the de-escalation phase continues.
Friday’s stocks on sale include Lockheed Martin (LMT). LMT stock trades at January 2026 levels after it posted quarterly results. The firm is forecasting $6.8 billion in cash flow in 2026. It is targeting patriot missile production of 2,000 annually over the next three to four years.
Northrop Grumman (NOC) is in value territory at a P/E of 18 times. Sentinel acceleration plans include a first flight in 2027. SRM production capacity has already doubled, so expect revenue growth to increase.
In Q1, Northrop recorded a backlog of $96 billion. Awards totaled $9.8 billion.
F-35 radar deliveries are on schedule.
In the retail sector, investors sold shares of Lululemon (LULU). The company hired an executive at Nike (NKE), which is also struggling considerably. NKE stock has been a break-even investment for shareholders in the last decade. It is cutting 1,400 staff to align lower sales with lower costs.
LULU stock is now at a 52-week low. Still, Heidi O’Neill’s experience in bringing direct-to-consumer to Nike might help LULU stock recover.
