Analyst Kristine Liwag from Morgan Stanley reiterated a Buy rating on Northrop Grumman and increased the price target to $765.00 from $714.00.
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Kristine Liwag has given his Buy rating due to a combination of factors tied to Northrop Grumman’s strong operating performance and future growth visibility. The company exceeded fourth-quarter 2025 earnings expectations and ended the year with a record backlog of nearly $96 billion, underscoring robust and diversified demand across its defense programs. Management’s historically cautious guidance, combined with the potential for substantial contract wins in areas such as next-generation aircraft and defense systems, points to possible upside versus the current 2026 growth outlook. In addition, anticipated support from a significantly larger U.S. defense budget helps reinforce management’s confidence in accelerating revenue growth into 2027 and 2028.
From a valuation standpoint, Liwag views Northrop Grumman’s high-quality portfolio as attractively priced given the current global security environment and heightened demand for advanced defense capabilities. While some adjustments were made to revenue, margin, and EPS forecasts for 2026–2028, the long-term earnings and free cash flow trajectory remains solid, even after incorporating higher capital expenditure and more conservative assumptions on share repurchases. Reflecting updated estimates and a re-assessment of the appropriate valuation multiple, Liwag raised the price target to $765, which implies meaningful upside from current levels. Taken together, these elements support maintaining an Overweight/Buy stance on the stock.
According to TipRanks, Liwag is a 5-star analyst with an average return of 15.8% and a 66.44% success rate. Liwag covers the Industrials sector, focusing on stocks such as Curtiss-Wright, Transdigm Group, and Leonardo Drs.
In another report released today, TipRanks – OpenAI also downgraded the stock to a Buy with a $764.00 price target.