Defense company Lockheed Martin is not expected to grow as much as competitors do in the coming years, according to Wells Fargo. Analyst Matthew Akers downgraded the stock from equal to underweight and cut his price target by $10. The new price target of $406 is still 1.6% higher than where the stock last closed, but is about 2.4% down from its previous target. Lockheed Martin will be in particularly bad shape if it doesn't win the Future Vertical Lift contract, which has a role in producing future long-range assault aircrafts. The decision is expected in October, though Akers said it is incumbent of Black Hawk, a type of assault aircraft. "The bull case for defense seems clear — geopolitical tensions are high and politicians have discussed higher defense spending," Akers said in a note to clients. "On the other hand, we think 2023 sets up as a difficult U.S. budget environment, with significant downside potential if tensions ease. Therefore, we are taking a more cautious view on the stocks." Akers said the caution comes from the fact that valuations shifted from a discount to a small premium with the onset of the Russian invasion of Ukraine . This underlies the fact that defense stocks can slide depending on the volatility of geopolitics, Akers said. Defense's current outperformance compared to the S & P 500 also made Akers weary of future estimates, especially considering pension insecurity. Shares of Lockheed Martin currently trade at a premium compared to peers, Akers said. Akers also downgraded L3Harris Technologies to equal weight from over weight, while remaining equal weight on Northrop Grumman and overweight on General Dynamics . — CNBC's Michael Bloom contributed to this report.