Lockheed Martin (LMT) reported strong Q2 results and raised 2026 guidance, though consistent operational execution remains a key focus for investors, RBC Capital Markets said in a note Thursday.

The analysts said the earnings beat was due to strength across the company's business segments, and improved execution during the quarter was encouraging after negative profit adjustments impacted previous quarters.

The company raised its 2026 guidance, with investors focused on growth in the Missiles and Fire Control segment and the timing of missile contract agreements, the analysts said.

During the quarter, the company was awarded a seven-year, $35 billion undefinitized contract action, or UCA, for Terminal High Altitude Area Defense, and management expects a similar PAC-3 agreement in H2 as missile framework agreements are converted into contracts, the analysts said.

Other major awards included a roughly $3 billion Guided Multiple Launch Rocket System production contract and a roughly $1.1 billion High Mobility Artillery Rocket System contract, while the timing of future F-35 production orders remains a key area to monitor, the analysts said.

RBC raised its price target on Lockheed Martin to $600 from $575 while keeping its sector perform rating.

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