Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Lockheed Martin Corp. (NYSE:LMT)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

Lockheed Martin Corp., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net earnings 6,833  6,230  5,046  2,002  5,302 
Net noncash charges 2,465  1,823  1,990  4,799  (245)
Changes in assets and liabilities (1,115) (742) (3,898) (325) 132 
Net cash provided by operating activities 8,183  7,311  3,138  6,476  5,189 
Interest payments, net of tax1 474  538  544  439  461 
Capital expenditures (1,766) (1,484) (1,278) (1,177) (1,063)
Free cash flow to the firm (FCFF) 6,891  6,365  2,404  5,738  4,587 

Based on: 10-K (filing date: 2021-01-28), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Lockheed Martin Corp.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Lockheed Martin Corp.’s FCFF increased from 2018 to 2019 and from 2019 to 2020.

Interest Paid, Net of Tax

Lockheed Martin Corp., interest paid, net of tax calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Effective Income Tax Rate (EITR)
EITR1 16.40% 14.00% 14.30% 28.10% 23.20%
Interest Paid, Net of Tax
Interest payments, before tax 567  625  635  610  600 
Less: Interest payments, tax2 93  88  91  171  139 
Interest payments, net of tax 474  538  544  439  461 

Based on: 10-K (filing date: 2021-01-28), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09).

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2 2020 Calculation
Interest payments, tax = Interest payments × EITR
= 567 × 16.40% = 93

Enterprise Value to FCFF Ratio, Current

Lockheed Martin Corp., current EV/FCFF calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 117,216 
Free cash flow to the firm (FCFF) 6,891 
Valuation Ratio
EV/FCFF 17.01
Benchmarks
EV/FCFF, Competitors1
Boeing Co. —
Northrop Grumman Corp. 19.79
Raytheon Technologies Corp. 37.56
EV/FCFF, Industry
Industrials 39.57

Based on: 10-K (filing date: 2021-01-28).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Enterprise Value to FCFF Ratio, Historical

Lockheed Martin Corp., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 100,886  135,002  98,580  108,976  87,500 
Free cash flow to the firm (FCFF)2 6,891  6,365  2,404  5,738  4,587 
Valuation Ratio
EV/FCFF3 14.64 21.21 41.00 18.99 19.08
Benchmarks
EV/FCFF, Competitors4
Boeing Co. — — 16.40 16.93 11.76
Northrop Grumman Corp. 17.47 21.80 20.12 33.26 21.05
Raytheon Technologies Corp. 35.26 21.94 27.92 27.84 19.13
EV/FCFF, Sector
Aerospace & Defense — 39.02 21.65 20.83 16.29
EV/FCFF, Industry
Industrials 34.50 25.25 23.44 25.45 24.09

Based on: 10-K (filing date: 2021-01-28), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09).

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3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= 100,886 ÷ 6,891 = 14.64

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Lockheed Martin Corp.’s EV/FCFF ratio decreased from 2018 to 2019 and from 2019 to 2020.