Northrop Grumman (NOC) AI Stock Analysis

• Market Cap: $71.10B
• Dividend Yield: 1.87%
• Average Volume (3M): 841.41K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.23
• Revenue Growth: 0.61%
• EPS Growth: 77.28%
• Country: US
• Employees: 97,000
• Sector: Industrials
• Sector Strength: 87
• Industry: Aerospace & Defense
• EPS (TTM): 3.32
• Shares Outstanding: 143,928,190
• 10 Day Avg. Volume: 986,545
• 30 Day Avg. Volume: 841,413
• PEG Ratio: -1.83
• Price to Book (P/B): 4.80
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 40.33
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 0.53
• Enterprise Value/Gross Profit: 11.01
• Enterprise Value/Ebitda: 4.11
• 1Y Price Target: $541.36
• Price Target Upside: 9.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 74 Outperform
• Price Target: $553.00 ▲(11.94%Upside)

Northrop Grumman's stock is bolstered by strong financial stability and modest technical indicators, suggesting a stable investment. The company's ability to maintain a record backlog and international sales growth supports its future prospects, despite recent setbacks in specific programs and decreased quarterly sales. Valuation is fair with a reasonable P/E ratio, although the dividend yield is modest. The earnings call reflects balanced sentiment, further underscoring a cautiously optimistic outlook.

Positive Factors

Defense Spending

Analysts maintain a Buy rating for Northrop Grumman, expecting the company to benefit from increases in US and Global defense spending.

International Growth

International growth is expected to grow significantly this year and potentially beyond, with demand high for missiles, command and control systems, and airborne ISR.

Market Position

NOC is seen as an attractive defensive name ideal for weathering a prolonged market downturn.

Negative Factors

Earnings Performance

Northrop Grumman reported adjusted EPS significantly below expectations, due to a pre-tax loss from B-21 program issues.

Profitability

Northrop Grumman is lowering its segment operating income outlook due to decreased profitability, primarily driven by lower margins expected at Aeronautics.

Program Costs

Shares were weighed down by another charge on the B-21 program related to a process change and higher material costs.

Northrop Grumman Business Overview & Revenue Model

Company Description

Northrop Grumman Corporation operates as an aerospace and defense company worldwide. The company's Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, and produces weapons and mission systems. It offers products and services, such as integrated battle management systems, weapons systems and aircraft, and mission systems. This segment also provides command and control and weapons systems, including munitions and missiles; precision strike weapons; propulsion, such as air-breathing and hypersonic systems; gun systems and precision munitions; life cycle service and support for software, weapons systems, and aircraft; and logistics support, sustainment, operation, and modernization for air, sea, and ground systems. The company's Mission Systems segment offers cyber, command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. This segment also provides airborne multifunction sensors; maritime/land systems and sensors; navigation, targeting, and survivability solutions; and networked information solutions. Its Space Systems segment offers satellites and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. The company was founded in 1939 and is based in Falls Church, Virginia.

How the Company Makes Money

Northrop Grumman makes money predominantly through contracts with government agencies, particularly the U.S. Department of Defense, NASA, and other international defense organizations. The company's revenue streams include the sale and support of advanced aerospace and defense systems, cybersecurity solutions, and space systems. A significant portion of its earnings comes from long-term government contracts, which provide steady and predictable revenue. Additionally, Northrop Grumman engages in strategic partnerships and collaborations to enhance its technological capabilities and expand its market reach. These partnerships, along with its research and development efforts, contribute to its competitive edge and financial performance.

Northrop Grumman Financial Statement Overview

Summary

Northrop Grumman demonstrates strong financial performance with robust profitability and a stable balance sheet. While revenue growth has decelerated, the company maintains strong margins and cash flows. Effective debt management and equity strength provide a solid foundation for navigating industry challenges and pursuing growth opportunities.

Income Statement

Northrop Grumman's income statement shows solid profitability and revenue stability. The TTM (Trailing-Twelve-Months) gross profit margin is robust, indicating effective cost management. However, the recent decline in total revenue growth compared to the previous year suggests stagnation, which could pose a challenge if not addressed. Net profit margins remain strong, providing a solid bottom line.

Balance Sheet

The balance sheet reflects a healthy financial position with a strong equity base. The debt-to-equity ratio is favorable, showing good leverage management, and the equity ratio indicates solid asset coverage by equity. Return on equity is competitive, although it has seen slight fluctuations, which could be monitored for future stability.

Cash Flow

Cash flows are solid, with positive operating cash flow and consistent free cash flow generation. There is a slight decline in the free cash flow growth rate, but the company maintains a strong operating cash flow to net income ratio, reflecting efficient conversion of earnings to cash. This positions the company well for future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	40.37B	41.03B	39.29B	36.60B	35.67B	36.80B
Gross Profit	7.81B	8.36B	6.55B	7.47B	7.27B	7.48B
EBITDA	5.70B	7.01B	4.23B	7.68B	8.73B	5.59B
Net Income	3.71B	4.17B	2.06B	4.90B	7.00B	3.19B
Balance Sheet
Total Assets	48.47B	49.36B	46.54B	43.76B	42.58B	44.47B
Cash, Cash Equivalents and Short-Term Investments	1.69B	4.35B	3.11B	2.58B	3.53B	4.91B
Total Debt	16.02B	16.49B	15.68B	14.70B	14.37B	16.35B
Total Liabilities	33.48B	34.07B	31.75B	28.44B	29.65B	33.89B
Stockholders Equity	14.98B	15.29B	14.79B	15.31B	12.93B	10.58B
Cash Flow
Free Cash Flow	1.78B	2.62B	2.10B	1.47B	2.15B	2.88B
Operating Cash Flow	3.53B	4.39B	3.88B	2.90B	3.57B	4.30B
Investing Cash Flow	-1.73B	-1.75B	-1.58B	-1.24B	2.06B	-1.21B
Financing Cash Flow	-3.17B	-1.40B	-1.76B	-2.61B	-7.00B	-432.00M

Northrop Grumman Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 494.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOC, the sentiment is Positive. The current price of 494 is above the 20-day moving average (MA) of 492.87, above the 50-day MA of 485.58, and above the 200-day MA of 489.29, indicating a bullish trend. The MACD of 2.73 indicates Positive momentum. The RSI at 52.45 is Neutral, neither overbought nor oversold. The STOCH value of 28.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOC.

Northrop Grumman Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LMT	80 Outperform	$107.45B	19.81	82.55%	2.88%	3.12%	-15.29%
GD	79 Outperform	$78.03B	20.18	18.23%	2.06%	14.11%	17.65%
LHX	76 Outperform	$46.17B	29.27	8.49%	1.94%	5.39%	36.86%
NOC	74 Outperform	$71.10B	19.44	25.41%	1.87%	0.61%	77.28%
HII	71 Outperform	$9.36B	17.20	12.27%	2.26%	-1.04%	-21.80%
Sector *	65 Neutral	$10.56B	15.49	5.57%	1.96%	2.71%	-26.28%
BA	58 Neutral	$161.77B	―	-162.23%	―	-9.15%	-406.76%

Northrop Grumman Corporate Events

Northrop Grumman Issues $1 Billion in Senior Notes

On May 29, 2025, Northrop Grumman Corporation issued $1 billion in senior notes, with $500 million due in 2030 and another $500 million due in 2035. The issuance, underwritten by major financial institutions, is part of the company’s strategic financial management, potentially impacting its operational flexibility and market positioning.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.

Northrop Grumman Announces $1 Billion Notes Offering

On May 27, 2025, Northrop Grumman announced the pricing of a $1.0 billion underwritten public offering of senior unsecured notes, consisting of $500 million of 4.650% notes due 2030 and $500 million of 5.250% notes due 2035. The proceeds are intended for general corporate purposes, including debt repayment, share repurchases, and working capital, with the offering expected to close on May 29, 2025, subject to customary conditions.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.

Northrop Grumman Shareholders Approve Key Proposals at Meeting

At Northrop Grumman‘s 2025 Annual Meeting of Shareholders on May 21, 2025, shareholders approved the election of twelve directors, the compensation of named executive officers, and the appointment of Deloitte & Touche LLP as the independent auditor for 2025. However, a shareholder proposal to enhance the clawback policy on unearned executive pay was not approved. The Board of Directors will consider shareholder input and feedback from the meeting.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.