Gautam Khanna, an analyst from TD Cowen, maintained the Hold rating on Northrop Grumman (NOC – Research Report). The associated price target was lowered to $480.00.
Gautam Khanna has given his Hold rating due to a combination of factors impacting Northrop Grumman’s financial outlook. The company experienced a sales shortfall in the first quarter, missing its revised guidance by $250 million, which raises concerns about the feasibility of meeting its ambitious sales targets for the second half of the year. This shortfall was attributed to delays in material receipts and contract awards, which, while expected to improve, still pose a risk to future sales projections.
Additionally, Northrop Grumman incurred a significant pre-tax charge related to the B-21 program, which affects cash flow projections and adds uncertainty to the program’s risk profile. Although the company maintains that future production will remain profitable, the charge highlights ongoing challenges with cost inflation and manufacturing process changes. Furthermore, while tariffs and other external factors appear to have a limited impact, delays in certain programs continue to be a headwind for sales growth. These elements combined contribute to the cautious Hold rating, as they suggest limited potential for upward revisions in the near term.
In another report released on April 11, Goldman Sachs also upgraded the stock to a Hold with a $521.00 price target.