JPMorgan says Iran’s drone attack on Israel over the weekend can drive a near-term surge in Lockheed Martin stock. The bank upgraded the defense stock, the prime contractor for the military’s F-35 fighter jet, to overweight from neutral in a Monday note, and raised its price target to $518 per share from $475. JPMorgan’s forecast implies roughly 15% upside from Lockheed’s closing price of $450.40 on Friday. LMT YTD mountain Lockheed Martin stock. Rising Middle East tensions since the start of the Israel-Hamas war in October has spurred geopolitical uncertainty and added another layer of volatility to an already uneasy market. Iran’s weekend strikes on Israel were in retaliation for an attack on an Iranian diplomatic compound earlier in April, which targeted top Iranian military commanders and was attributed to Israel. In the short-term, JPMorgan analyst Seth Seifman says his bullish outlook on Lockheed could find more support from stepped-up military preparedness springing from the Middle East, especially since the defense sector is largely under-owned by institutional investors. “We had prepared our preview and LMT upgrade prior to the attack and do not venture a prediction regarding how that specific situation will evolve,” Seifman said, referring to Lockheed’s scheduled first-quarter earnings release on April 23. “What we can say is that it’s a dangerous world and while that is not a sufficient condition for Defense stocks to outperform, it is a potential source of support, especially when they are under-owned.” The analyst added that Lockheed Martin and the array of defense stocks could benefit from a small increase to the defense budget last month, forecasting some supplemental spending for Ukraine, Israel and Taiwan. Overall, “any change in market momentum would likely leave Defense stocks — for which LMT is the bellwether — well-placed in relative terms,” according to Seifman. Lockheed Martin stock has lagged the broader market so far in 2024, falling less than 1% through Friday. — CNBC’s Michael Bloom contributed to this report.