Goldman Sachs sees potential pressure to Lockheed Martin 's stock if the U.S. tries to rein in spending. Analyst Noah Poponak said defense stocks currently price in a global geopolitical struggle among the world's biggest countries, but they could take a hit as the U.S. refocuses on its cumulative debt. Defense stocks could suffer if defense budgets, valuations or their earnings come off the near all-time highs they are currently running near, he said. Poponak downgraded Lockheed Martin to sell from neutral, nothing that the company is particularly vulnerable to any changes in government budgets with 75% exposure. He also lowered his price target by $56 to $332, which presents a downside of 28% from where the stock closed Thursday. "The defense budget has grown significantly to an all-time high level, and with a large level of cumulative US government debt, focus on slowing spending growth or reducing it outright could return in 2023," Poponak said in a note to clients. "LMT is highly diversified across the defense end-market, which means it often grows at similar rates as the budget." The stock dropped nearly 3% in premarket trading. Beyond changes to the government budget, Poponak expects financial losses from halted deliveries of its F-35 jets due to a December incident that is still being investigated. He said the firm should also experience uneven growth with other offerings such as its Blackhawk aircrafts and Overhead Persistent Infrared, or OPIR, satellites. Inflation will also limit organic growth in the coming years, he said, leading to a mid-2020s recovery just to where Lockheed Martin performed in 2021. Poponak expects little-to-no cash flow growth in the next few years. Goldman Sachs is relatively less optimistic about Lockheed Martin compared with peers, as the firm expects a 3% average upside for defense and space stocks and a 29% average upside for aerospace stocks. But Poponak also downgraded Northrop Grumman to sell from neutral and Raytheon to neutral from buy. — CNBC's Michael Bloom contributed to this report.