Why The Space Theme Is Underperforming This Year

+9.34%
Upside
458
Market
500
Trefis
LMT: Lockheed Martin logo
LMT
Lockheed Martin

Our theme of Space Stocks – which includes U.S.-based established aerospace players, upstart space companies, and satellite communications firms – has underperformed this year, rising by just about 5% year-to-date, compared to the S&P 500 which remains up by almost 19% over the same period. While futuristic stocks, in general, have fared a bit better this year amid cooling inflation and the recent pause in interest rate hikes by the Federal Reserve, returns on the space theme have been dragged down by the aerospace and defense contractors who have seen interest cool after seeing a rally in 2022 following the Russian invasion of Ukraine.

That being said, the theme still remains promising for a couple of reasons. Firstly, private players are playing an increasing role in space exploration, partnering with government space programs. Commercial space activities are also growing, with new markets opening up. Satellite communications, for instance, appear to be going mainstream. Apple unveiled text-based satellite connectivity for emergency situations on its latest iPhone 14 devices last year, while T-Mobile US is working with SpaceX to connect a majority of the smartphones on T-Mobile’s network to SpaceX satellites. The frequency of satellite launches has also been on the rise, as satellites become more compact and more cost-effective, opening up new opportunities.

Within our theme, Iridium stock (NASDAQ:IRDM) has been the best performer, rising by about 14% year-to-date. The company operates the Iridium satellite constellation which is used for communication services. On the other side, Lockheed Martin stock (NYSE:LMT) has been the worst performer, with its stock down by about 6% year-to-date.

Relevant Articles
  1. Lockheed Martin Stock Will Likely Remain In Focus After A Stellar Q1
  2. Should You Pick Lockheed Martin Stock At $430 After Q4 Beat?
  3. Down 20% This Year Is RTX A Better Pick Over Lockheed Martin Stock?
  4. After An 8% Rise In A Month What’s Next For Lockheed Martin Stock
  5. Which Is A Better Pick – Lockheed Martin Stock Or Starbucks?
  6. Here’s What We Expect From Lockheed Martin’s Q2

What if you’re looking for a portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.

Returns Jul 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 LMT Return -1% -6% 83%
 S&P 500 Return 2% 19% 103%
 Trefis Multi-Strategy Portfolio 6% 26% 305%

[1] Month-to-date and year-to-date as of 7/25/2023
[2] Cumulative total returns since the end of 2016


Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates