We're Raising Our Price Target for This Defense Holding

* With a quiet day on tap and low trading volumes, we will stick with our near-term portfolio plan.

* Lockheed Martin F-35 developments are tracking, so we are boosting our price target.

* Apple's changing of the CFO guard should bring no major surprises.

With little in the way of market-moving earnings this morning and the only fresh economic data point being August Consumer Confidence at 10 a.m. ET, it’s fair to say today’s market action is likely to be a spillover from yesterday. The big events of the week — Nvidia’s NVDA earnings and the July PCE price index data — are still ahead of us. We’ll continue to do our homework on potential new Bullpen candidates and keep a close watch on portfolio holdings that are encroaching on our price targets.

After yesterday’s move lower for the S&P 500 and Nasdaq Composite, we have a fewer number of holdings close to their price targets . Remember that coming into this week, the market was short-term overbought and the S&P 500’s valuation was stretched, so it shouldn’t surprise us if it gives back some of its recent gains, especially with lighter-than-usual trading volumes. For example, trading volume for the S&P 500 yesterday was 52% of its average. These lower volumes can lead to outsized market reactions, and for that reason, our intention is to walk carefully this week but keep our eyes open for any opportunities that present themselves.

Now let’s discuss some news on portfolio holdings.

Lockheed Martin: F-35 Developments Are Tracking, Boosting Our Price Target

The U.S. government's F-35 Joint Program Office and Lockheed Martin LMT reached an agreement for the acceptance and delivery of Technology Refresh 3 (TR-3) enabled F35 aircraft. As part of the agreement, the JPO will withhold a portion of final aircraft delivery payments from Lockheed until TR-3 combat capability is qualified and delivered. What we need to know in this is that the substance of the agreement is consistent with the guidance Lockheed issued when it reported its June quarter. It also clears the runway for more deliveries in 2025-2026.

While we have yet to get Lockheed’s multi-year delivery forecast, we can now lift our LMT price target to $575 from $540. When Lockheed presents that forecast, we’ll look to fine-tune our target as needed. Because we recently trimmed back the portfolio’s exposure to LMT, locking in a nice slice of gains, we continue to rate LMT shares a Two.

Geopolitical events of the last few years have ballooned Lockheed’s backlog levels, which means now that F-35 shipments are flowing again, the company should continue to generate ample earnings and cash over the next few years. Following the 18% pop in the stock over the last few weeks, support clocks in around $505, a nice place to potentially pick up some shares compared to today’s overbought levels.

Apple's CFO Change Is Not a Big Deal

Apple AAPL announced that CFO Luca Maestri will transition from that role on January 1, continuing to report to Tim Cook as he leads the company’s Corporate Services teams. Stepping into the CFO role will be Kevan Parekh, who has been with Apple for 11 years and is currently the company’s Vice President of Financial Planning and Analysis.

While some may quibble or ask, “Why now?” the reality is Parekh has worked alongside Maestri for roughly a decade, which means the odds of any meaningful change in Apple’s financial execution and capital discipline are likely to be minimal. We see no real reason to complain, but we also wouldn’t mind Apple growing its annual dividend at a slightly faster pace than it has been.

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At the time of publication, TheStreet Pro Portfolio was long LMT, AAPL and NVDA.