Chinese Sixth Generation Fighters Poised to Cut Pentagon Demand For F-35s: Lockheed Martin Stock Drops After New Jets’ Unveiling

<p >Stock of the United States’ largest defence contractor Lockheed Martin was downgraded to Hold from Buy at Deutsche Bank by 14.5 percent, with a price target of $523 down from $611. An analyst at the bank specifically cited "China's combat aircraft modernisation efforts" as a reason for the decision, following the <a href=" target="_blank">release of footage</a> showing two Chinese sixth generation fighter aircraft in flight. "We're downgrading Lockheed to Hold [from Buy] as we feel our prior thesis struggles to hold water and we have increased concern on the long-term support for F-35 in the face of China's combat aircraft modernisation efforts," Deutsch Bank analyst Scott Deuschle stated. He added that he saw "the reveal of further advancements in combat aircraft capabilities by China as potentially undermining long-term [Pentagon] demand for the F-35 aircraft." The the first images of sixth generation fighter aircraft were released on December 26, with the two new fighters notably having tailless configurations – a key requirement for sixth generation fighters never before seen on any flying fighter in the world. </p><p ><img src=" title="Chinese Sixth Generation Fighter Prototype "></p><p >The Chinese J-20 and American F-35 are currently the only fifth generation fighters in large scale production worldwide. With China increasingly expected to introduce a sixth generation fighter long before the United States does, and likely not long after the end of the decade, this will likely leave the F-35 at a steep disadvantage in terms of performance, escalating calls to curtail production. Funding could be re-allocated to a sixth generation program, or potentially to asymmetric alternatives such as shorter ranged unmanned aircraft or surface to air missile systems. The F-35 is already considered to be at a disadvantage compared to the J-20, as while the two are considered to have similarly advanced avionics, composite materials, and stealth coatings, the J-20 has approximately double the range, a far superior flight performance, a supercruise capability, a much higher missile carrying capacity, and a larger radar. Progress on the J-20 program has been a key driver of efforts to enhance the F-35’s performance, including through development of the new AN/APG-85 radar, AIM-260 air-to-air missile, and a new electronic warfare suite. Incremental upgrades, however, are not expected to be capable of making the F-35 or the J-20 viable for the most competitive air-to-air missions once sixth generation fighters begin to be introduced. </p>