Lockheed Martin’s (NYSE:LMT) multi-year growth outlook is facing serious headwinds following a wave of unexpected charges and operational setbacks, prompting Truist Securities to downgrade the defense giant from Buy to Hold.

Lockheed Martin reported on Tuesday that its second-quarter profit plunged by about 80%, after the U.S. defense group recorded a pretax loss of $1.6 billion, mainly linked to a classified program within its Aeronautics segment,

Truist also flagged a “tax overhang of $4.6B” due to a dispute with the IRS. Lockheed has taken a $100 million P&L accrual but “fundamentally disagrees with the grounds for the claim” and is prepared to pursue legal action.

Lockheed Martin has disclosed a significant decrease in net earnings for the second quarter of fiscal 2025 (Q2 FY25), reporting $342m compared to the $1.64bn recorded in the corresponding period of the previous year.

Although Lockheed executives remain bullish on the secretive programme's long-term prospects, the effort generated $950 million in losses during the recent second quarter, tied to setbacks with design,

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Lockheed Martin’s quarterly profit was hit by more than $1.7 billion in charges during the second quarter.

Lockheed Martin Corp. caught investors off guard with $1.6 billion in charges and a possible tax hit that sent its stock tumbling, the latest setback for the defense giant whose popular F-35 jet faces criticism over cost overruns and delays.