Lockheed Martin Corp. (NYSE:LMT) just got a big vote of confidence from Morgan Stanley. The defense giant secured a long-term F-35 production framework with the U.S. government, and that was enough to push the bank to upgrade the stock.

Morgan Stanley raised Lockheed Martin's rating to Overweight from Equal Weight and increased its price target to $835 from $690, according to CNBC. The new target represents about 31.5% upside from Lockheed Martin's Monday closing price.

The company announced last week that it had agreed on a framework for 850 F-35 fighter jets over 10 years with the U.S. Department of Defense, targeting annual production of 156 aircraft, with spare parts, upgrades and sustainment also included. Final pricing and contracts remain subject to funding, congressional authorization and negotiations.

Analyst Kristine Liwag said the agreement "takes significant risk out of the stock." She also wrote, "Missile ramp on-pace, driving mid-teens [missiles and fire control] growth, providing upside."

Liwag called the framework "a significant derisking event for the stock," following concerns that F-35 funding could limit missile investment elsewhere in the U.S. defense budget.

Morgan Stanley also cited third-quarter 2026 progress in munitions manufacturing. Partnerships with defense technology companies such as Hadrian could support faster production and help address competition from newer defense manufacturers.

Record Backlog And Missile Contracts Boost Outlook

Last week, Lockheed Martin beat third-quarter expectations and raised its 2026 outlook, driven by sales growth across all four business segments. Its backlog reached a record $292 billion, bolstering visibility into future revenue.

CEO Jim Taiclet said defense spending could remain elevated for years as Russia expands activity in Europe, Iran pursues regional ambitions and China strengthens its military presence across the Pacific. He emphasized deterrence, integration and 'wartime' manufacturing scale as Lockheed Martin responds to those pressures.

Lockheed Martin has also awarded new contracts for PAC-3 and THAAD missile production, including $4.7 billion to L3Harris Technologies, Inc. (NYSE:LHX) for PAC-3 propulsion, $14.7 billion to Boeing Co. (NYSE:BA) to triple PAC-3 seeker production, and $1.6 billion to Northrop Grumman Corp. (NYSE:NOC) for propulsion and other missile components.

MarketDash's Edge Rankings place Lockheed in the 94th percentile for quality and the 88th percentile for momentum, reflecting its strong performance in both areas. MarketDash's screener allows you to compare LMT's performance with its peers.

Price Action: Year-to-date, LMT stock surged 31.33%, as per market data. During Tuesday's pre-market trading session, the stock was trading 1.09% lower at $628.30.