Lockheed Martin (NYSE: LMT) reported earnings on Tuesday, and the crowd went mild.

Seriously. Rarely has an earnings beat the size of the one Lockheed reported this week been met with such a gigantic collective shrug of dismissal as this one. Heading into earnings day, Wall Street analysts confidently predicted Lockheed would report a $6.31-per-share profit on $17.8 billion in sales. Instead, Lockheed reported $18 billion in sales, and a $7.28-per-share profit, a full 15% better than expected. But two days later, Lockheed Martin stock is still up less than a couple of percentage points.

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And I can't help but wonder why.

Lockheed Martin beat big in Q1 earnings (or did it?)

The most logical culprit for investors' underwhelming response to Lockheed's earnings beat is the fact that its sales didn't grow all that much year over year, rising just 4%. True, earnings grew 14% year over year as its gross profit margin improved markedly (to nearly 13%).

That said, the quality of Lockheed Martin's earnings seems suspect. While generally accepted accounting principles (GAAP) results certainly improved, the cash flow backing up those GAAP earnings didn't -- at all. Operating cash flow for the quarter was actually down year over year at just $1.4 billion, and free cash flow (FCF) declined significantly, from $1.3 billion in Q1 2024 to just $955 million in Q1 2025. Long story short, for every $1 in GAAP profit Lockheed says it earned, the actual cash profit it produced was only $0.56.

That's not a good number. (But read on -- it might get better.)

Going line by line at Lockheed Martin

Sales grew in three of Lockheed Martin's four main business segments, with space being the exception. Profit margins expanded in all four, with the company's missiles and fire control business throwing up the strongest numbers, $3.4 billion in sales at a 13.8% operating profit margin, up an astounding 340 basis points from a year ago.

The company's flagship aeronautics business (responsible for building F-16 fighter jets and F-35 stealth fighters) put up the weakest results. Sales grew a subpar 3% here, with profit margins showing both the smallest improvement year over year (just 30 basis points), and also the weakest absolute results of any division. Lockheed earned only 10.2% margins in aeronautics last quarter.

With aeronautics still Lockheed's biggest business segment, that doesn't bode well for future profits.

Lockheed Martin's full-year guidance

Speaking of the future, guidance may be another reason why investors aren't rewarding Lockheed much for its big earnings beat. According to management, 2025 revenue will range from $73.75 billion to $74.75 billion, so basically $74.25 billion at the midpoint, or very close to the $74.27 billion Wall Street consensus.

Earnings for the year, however, will fall short. Management anticipates profits of $27 to $27.30 per share. That makes the midpoint of the range $27.15, or $0.07 short of the consensus estimate of $27.22.

So Lockheed essentially told investors that, despite beating earnings by nearly $1 a share in Q1, it's not going to raise guidance for the full year by $1 a share. To the contrary, Lockheed is probably going to miss earnings later this year. Sure, the miss will be by only a few pennies. But the fact that Lockheed will miss at all has to concern investors.

Is Lockheed Martin stock a sell?

So that's the bad news. The good news is this: While profits may not be all investors hope for this year, free cash flow is looking likely to rebound strongly from Q1's underwhelming performance. Last year, Lockheed generated $5.3 billion in free cash flow, almost exactly equal to its reported net income of $5.3 billion. This year, Lockheed thinks it can generate anywhere from $6.6 billion to $6.8 billion -- much better than you might expect after Q1 FCF fell short of $1 billion.

Taken at the midpoint of $6.7 billion, that works out to free-cash-flow growth of 26%, a superb growth rate, and much stronger than the company's forecast for sales growth (just 4.5%).

Assuming Lockheed hits its free-cash-flow target, furthermore, the stock would be trading at only about 16.2 times current-year FCF. For a defense stock expected to grow profits at nearly 13% annually over the next five years, and paying a respectable 2.8% dividend yield, that's not expensive at all.

In fact, it just might be cheap enough to make Lockheed Martin stock a buy.

Should you invest $1,000 in Lockheed Martin right now?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

Novo Nordisk (NYSE: NVO), the Danish drugmaker of GLP-1 weight loss drugs Ozempic and Wegovy, slipped 2% through 10:30 a.m. ET Friday after suffering a one-two punch from Reuters and a bank analyst.

On Thursday, Reuters reported weak U.S. prescription data is contributing to investor concerns that Novo Nordisk is no longer a growth stock. Taking a quick cue from the report, Singapore's DBS Bank has flipped 180 degrees, cutting its rating on Novo Nordisk stock from "buy" all the way to "sell."

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Everybody hates Novo Nordisk

Let's start with the Reuters report. Ever "since launching its wildly popular weight-loss drug Wegovy in 2021," says Reuters, Novo has trained investors to expect the company's earnings reports to feature regular updates of new and improved sales guidance. In February, however, the company said sales will grow only 16% to 24% this year, which is "a much slower pace than in the past few years."

Reuters cites IQVIA data to show that "U.S. Wegovy prescriptions have plateaued since mid-February," versus Eli Lilly's (NYSE: LLY) competing Zepbound GLP-1 drug, which is taking market share from Novo. Adding to Novo's misery, clinical trial data on the company's new CagriSema drug, which was supposed to be even better than Wegovy and Ozempic, isn't measuring up.

Result: Investors are now bracing for bad news when Novo Nordisk reports its Q1 earnings on May 7.

Is Novo Nordisk stock a sell?

Digesting all this news, DBS Bank concludes Novo Nordisk's run is done and that it's time to sell the stock. This morning, The Fly reports that DBS has downgraded Novo stock all the way from buy to sell and set a price target of 330 Danish krone -- about $50.28 -- on the stock. That's about 18% below where Novo stock trades today.

I disagree.

Priced at 18.2 times earnings today, Novo looks to me more than fairly priced for a 16%-to-24% growth rate. In fact, it might even be cheap. The best time to buy Novo Nordisk might actually be right now, when everybody else seems to hate it.

Should you invest $1,000 in Novo Nordisk right now?

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Pony AI (NASDAQ: PONY) stock just keeps on galloping. For the third day in a row, the small-cap Chinese robotaxi and robotruck company rode higher on Friday, building on huge gains Wednesday and Thursday. The stock tacked on another 22.7% through 9:40 a.m. this morning and now is up more than 120% over the past three days.

Yes, you read that right: Pony doubled, and then went up even more.

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Pony express delivers good news

So far this week, the biggest little Chinese small cap you've never heard of (before this week) has announced it's producing three new robotaxi models in cooperation with Beijing Automotive Group, Guangzhou Automobile Group, and Toyota Motor (NYSE: TM), respectively, and that it has lined up local partner Hesai Group (NASDAQ: HSAI) to supply it with AT128 lidar sensors for its robotaxis.

Today, Pony added that it's partnering with another local company, Tencent Holdings (OTC: TCEHY), to further "advance autonomous driving technology and robotaxi commercial deployment."

This tie-up will pair Pony's "cutting-edge" autonomous driving system with tech products from Tencent, specifically the latter's Weixin (or "WeChat") social media, messaging, and payment app, Tencent Maps, and its "robust cloud computing, big data and AI infrastructure," all of which sound to me like logical add-ons to an electric-car-slash-robotaxi service.

Is Pony AI stock a buy?

Tencent might do well to ante up a bit of cash. Tencent's tech contributions are all great, but there's no mention of financial support in the press release, and Pony is still burning cash, and losing $274 million a year.

While the company has considerable cash reserves, a little more could go a long way to ensuring Pony stock doesn't go bankrupt before 2029, the first year it's expected to be profitable, according to analysts polled by S&P Global Market Intelligence. Meanwhile, until the financial picture firms up, I must still consider Pony a speculative, momentum-driven stock.

Should you invest $1,000 in Pony Ai right now?

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tencent. The Motley Fool has a disclosure policy.

Was it only Monday that the U.S. stock market was falling apart, the Dow Jones Industrial Average down 1,000 or more points, and economic nightmare just around the bend? Indeed it was, and yet, two straight days of strongly rebounding markets seem to have erased that nightmare from investors' minds, at the same time as it erased losses from their portfolios, and sent stock market averages charging deeply into "the green."

In late morning trading Wednesday, 10:55 a.m., the Dow is solidly higher with a 2.6% gain, while the broader S&P 500 and tech-heavy Nasdaq are doing even better, up 3% and 4%, respectively. Notable among the stocks enjoying the euphoria today are three consumer goods companies in particular: toymakers Hasbro (NASDAQ: HAS) and Mattel (NASDAQ: MAT), up 5.1% and 6.6%, respectively, and Walmart (NYSE: WMT) with a 0.9% gain (although Walmart, too, was doing even better, earlier).

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Why consumer goods stocks love President Trump's new tariffs policy

What's behind the optimism? Mr. Donald J. Trump.

Earlier in the week, as you may recall, President Trump spooked stock markets with calls for the dismissal of Federal Reserve Chairman Jerome Powell, and threats that failure on the Fed's part to lower interest rates would hurt the economy, raising the specter of recession in many investors' minds. The President's tariffs war, too, was in full swing, with little evidence (yet) of other countries bowing to his demands for economic concessions to avoid imposition of "reciprocal" tariffs.

But my, what a difference a day (or two) makes!

As Wednesday dawned, the President had changed his tune on Powell entirely, reassuring investors he actually has "no intention" of firing the Fed Chair. On tariffs, too, the news is now good, or at least substantially less bad than it seemed on Monday. The President is now promising to "substantially" reduce tariffs on Chinese imports from their current, prohibitive, level of 145%. Once all is said and done with his negotiations, promises the President, tariffs "won't be anywhere near that high."

This, in a nutshell, is why shares of Hasbro, Mattel, and Walmart are all benefiting today. While exact percentages are hard to nail down, and vary year to year, Hasbro and Mattel are both widely recognized to depend heavily on imports of toys, cheaply manufactured in China, to sell to American consumers. Estimates range as high as 70% for the amount of their toys that both companies source from China.

Likewise Walmart is not just a big retailer for both companies' products, but a big retailer of lots of other consumer goods sourced from China. 145% tariffs on Chinese imports could have blown (and to be honest, probably still can) blow a big hole in the business models of all three companies.

But that risk has now come down -- how did the President put it? -- "substantially."

Which of these stocks would you buy?

All this being said, when stock markets score back to back 1,000-plus point gains on headline news, and particularly headline news coming from a source as erratic as Mr. Trump, there's a risk of investors getting irrationally exuberant.

While I'm as happy as any other investor today, to learn that the threat of a global trade war and U.S. recession may not be quite as dire as it looked a couple days ago, valuation still matters. If you're looking to play today's rally in consumer goods stocks, that means you're probably safer sticking to low price-to-earnings ratio stocks like Hasbro, which costs a modest 19 times earnings, or even Mattel -- twice as cheap with a P/E of barely 9x earnings -- than with a relatively expensive retailer like Walmart, which costs nearly 40 times earnings.

Remember: What President Trump giveth today, he could just as easily taketh away tomorrow with another U-turn on tariffs policy. Caveat investor -- and stick to value stocks if you want to stay safe.

Should you invest $1,000 in Walmart right now?

Before you buy stock in Walmart, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walmart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

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*Stock Advisor returns as of April 21, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Hasbro. The Motley Fool has a disclosure policy.

Stock markets got over their case of the Mondays really quick this week, and after regaining all their Monday losses on Tuesday, are roaring even higher as Wednesday gets off the ground.

Financial stocks are doing particularly well this morning. As of 10:20 a.m. ET, shares of Bank of America (NYSE: BAC) are gaining a respectable 2.8%, while JPMorgan Chase (NYSE: JPM) is doing even better with a 3.6% rise, and American Express (NYSE: AXP) is doing best of all -- up 5.4%.

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The American stock market's big news day

What's behind the optimism? President Donald Trump, of course.

After spooking markets earlier in the week with threats to oust Federal Reserve Chairman Jerome Powell, Trump ratcheted back the rhetoric this morning, even going so far as to assure investors he has "no intention" of firing Powell (or at least not until the end of his term of office next May). This promise, for as long as it lasts, may be of particular reassurance to financial investors as they're more closely tied to moves by the Fed than anyone else, and were presumably more worried than others about what political pressure on the Fed might do to interest rate policy.

Meanwhile, in tariffs news, the president held out the prospect of falling tariffs on China, which holds the potential to both reduce strain on the American economy and -- potentially -- short-circuit an incipient global trade war that seemed all but certain to happen as recently as Monday. Both prospects diminish the chance of the U.S. falling into recession this year, and that's music to investors' ears.

Referring to tariffs on Chinese imports that have reached levels capable of potentially ending trade between the two countries entirely, the president opined that once negotiations run their course, tariffs on Chinese goods will probably come down "substantially." Forget 145% tariffs. They soon "won't be anywhere near that high."

Is it time to buy bank stocks?

Worries over tariff policy, and the recession risk they raise, have been especially concerning to the banking and credit card industries, reports The Wall Street Journal. As recently as this morning, that paper reported on how credit card companies are bracing for an economic downturn in which consumers stop spending because imported goods have become simply too expensive to buy.

All three of the banks named above were cited in the story, with Amex in particular warning that "consumers are holding off on nonessential splurges" and JPMorgan said to be ratcheting up reserves against an expected recession. The good news is that BofA says consumers are, for now, "still solidly in the game," however. And if Trump ends up calling off his trade war in time to avert a recession, things could turn out as well as investors today seem to feel they will.

Potentially, this could all work out very well indeed for investors brave enough to roll the dice at today's better-than-Monday, but still depressed, valuations. American Express stock is now trading for an unchallenging 17.6 times trailing earnings, while Bank of America and JPMorgan stocks look downright cheap at 11.4 and 11.6 times earnings, respectively.

Of the three, I personally prefer BofA and JPMorgan over Amex, though. Not only are their valuations more attractive, but JPMorgan also pays a 2.4% dividend yield, and BofA 2.7% -- both twice the dividend yield on Amex stock. If you're in the mood to do some bank stock shopping today, I'd start with those two.

Should you invest $1,000 in JPMorgan Chase right now?

Before you buy stock in JPMorgan Chase, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and JPMorgan Chase wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

Now, it’s worth noting Stock Advisor’s total average return is 811% — a market-crushing outperformance compared to 153% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool has a disclosure policy.

For the second day running, shares of Europe's Airbus (OTC: EADSY) are declining. As of 11:40 a.m. ET Friday, the aerospace giant's stock is down 2.9%, bringing losses for the past two days past 6%. But why?

Yesterday, Delta Air Lines (NYSE: DAL) told investors on its morning quarterly conference call that the airline intends to "minimize" any tariffs it might have to pay under President Donald Trump's on-again, off-again "reciprocal tariffs" initiative. Said Delta CEO Ed Bastian: "The one thing that you need to know we're very clear on is that we will not be paying tariffs on any aircraft deliveries we take. ... we've been clear with Airbus on that, and we'll work through and see what happens from that."

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Reading between the lines

Now, you might think that's not really Delta's decision to make. The way tariffs work at a basic level is, the U.S. government sets a tariff rate on goods (like airplanes) imported from abroad. And then whoever imports those goods (like Delta) pays the tariff. Except Delta seems to be saying this is not going to happen, and the question then becomes, if Delta isn't paying the tariffs, then who is?

And the implication is that Airbus will have to pay the tariffs.

Either that, or Delta won't be buying the planes from Airbus. It might shop Boeing (NYSE: BA) instead.

Is it time to sell Airbus?

And now you can understand why Airbus investors are feeling a bit nervous for another day that their company may start losing airplane sales.

Don't get me wrong. That may happen. That may be a risk. Airbus builds planes primarily in Europe, after all, and Europe-built planes would be subject to tariffs, so those sales seem at-risk. However, Airbus does assemble some of its most popular A320 and A220 airplanes right here in the U.S. as well, and those planes should dodge tariffs easily. That may even be what Delta was referring to, that in order to avoid paying tariffs, it will still buy A320s from Airbus, and buy only its bigger aircraft from Boeing.

It's still not great news for Airbus, true. But it's not a total loss, and Airbus investors don't need to panic just yet.

Should you invest $1,000 in Airbus SE right now?

Before you buy stock in Airbus SE, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Airbus SE wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

At long last, it's Friday, and a turbulent week of selling, buying, and even more selling is at an end.

Investors seem exhausted by the roller-coaster week. Major market indices are slightly in the green as traders pause in relief, unfazed by the latest economic news that China is retaliating from the most recent U.S. tariffs hike on Chinese exports (to 145%) by raising its own tariff on U.S. exports to 125%.

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Gold stocks, meanwhile, are looking like one bright pocket of green in the market today, with shares of Barrick Gold (NYSE: GOLD) rising 5.6% through 10:30 a.m. ET, Newmont (NYSE: NEM) up 6.6%, and Coeur Mining (NYSE: CDE) doing best of all -- up 7.6%.

UBS loves gold stocks

Giving the gold industry a lift this morning is investment bank UBS, which this morning announced higher price targets on both Barrick and Newmont. As StreetInsider.com reports, UBS today raised its price target on Barrick stock to $25 a share, while maintaining a buy rating.

UBS also upgraded Newmont to buy, and raised its price target by 20%, to $60 a share. As the banker explained, gold stocks in general are following a script seen in past "major macro shocks," such as the Great Financial Crisis of 2008 and the pandemic of 2020.

To wit, UBS says, "gold & gold equities were initially sold" to cover margin calls and generally pare back stock investments, but "are now rallying" again. UBS sees gold as a safe haven in a turbulent market, and predicts the shiny metal will rise in price to as much as $3,500 an ounce (from $3,230 today) by 2026.

Long story short, UBS is predicting a "stronger for longer gold price environment" that should benefit all gold stocks. The analyst likes Newmont better than the others, though, because the stock has greatly underperformed the gold price index over the last five years, and so will presumably benefit disproportionately from any return to the mean.

Which gold stock should you buy?

Is UBS right to recommend buying gold stocks? Investors won't have to wait long for their first clue. According to Yahoo! Finance data, Newmont will report earnings less than two weeks from now, on April 23, followed by Barrick on April 29. Coeur Mining recently confirmed its own Q1 earnings date will lag a bit behind, arriving on May 7, but even just seeing the forecasts from the first two gold mining companies should give us a strong hint of which way things are heading.

What I can tell you already today is that analysts are feeling pretty optimistic about these stocks as a group. Valued just under 18 times trailing earnings today, forecasts see Newmont profits surging in the year ahead, such that the stock's forward P/E ratio is just 8.4. Barrick balances a better trailing P/E (15.8) against more modest growth expectations yielding a forward P/E of 11.6.

Coeur, on the other hand, not only has its earnings farthest out, but also looks least attractive from a valuation perspective. Priced at 36.6 times trailing earnings today, Coeur stock's forward P/E drops to 13.7 looking 12 months out, indicating strong profits growth -- but still a more expensive valuation than its gold-mining peers. Adding to the unattractiveness, Coeur is currently the only one of these three gold stocks that is not generating positive free cash flow.

So which of these three stocks would I buy, were I in the market for a good gold stock? Honestly, my hunch is that Barrick is the best of the bunch. Valued on P/E, the stock seems reasonably priced already, and its valuation isn't as dependent on hitting aggressive growth targets as is Newmont's.

Additionally, Barrick has the least leveraged balance sheet, with only $1.2 billion more debt than cash. And Barrick generates substantial free cash flow of $1.3 billion -- not as much as the $3 billion that much larger Newmont throws off, granted, but still a tidy sum.

Factor in its modest 2.3% dividend yield, and Barrick looks like a decent way to invest in UBS's prediction of a bright future for gold stocks to me.

Should you invest $1,000 in Barrick Gold right now?

Before you buy stock in Barrick Gold, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Barrick Gold wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.