Macquarie upgrades Lockheed, citing re-based jet program

Defense News ~ ATLANTA, March 10 (Reuters) - Macquarie Research raised its rating on defense contractor Lockheed Martin Corp (LMT.N) to "neutral" from "underperform" on Wednesday, saying negative news reports on the company's Joint Strike Fighter program were poised to subside.

The U.S. Defense Department has restructured the fighter-jet program to extend its development phase. In recent months, concern about the project, which is the Pentagon's most expensive weapons program, had mounted amid declining tolerance in Washington for cost overruns and schedule delays.

"In our opinion, the period of negative news flow for the JSF is coming to an end, and with the program re-based, we think investors can be more comfortable with the lower risk, but lower growth outlook," Macquarie analyst Rob Stallard said in his note upgrading the stock.

Stallard had cut the rating on Lockheed to "underperform" from "outperform" in December, saying the program for the radar-evading fighter was vulnerable to cuts and delays.

Lockheed shares were up 29 cents to $82.51 in morning New York Stock Exchange trading. The stock has risen about 9 percent so far this year. (Reporting by Karen Jacobs; Editing by Lisa Von Ahn)