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Northrop Grumman
(NYSE:NOC)
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Rating:70Outperform
Price Target:
$576.00
▲(6.23% Upside)
Action:Upgraded
Date:07/21/26
The score is driven primarily by solid financial quality and a notably positive earnings outlook (raised 2026 sales/EPS guidance, strong bookings, and record backlog). These strengths are tempered by weak technical positioning versus long-term moving averages and meaningful balance-sheet leverage, while valuation remains reasonable with a modest dividend.
Positive Factors
Backlog & Bookings
A $105B backlog and $20B quarterly bookings provide durable multi-year revenue visibility and production cadence. High book-to-bill signals persistent, contract-backed demand across programs, enabling planning, capacity investments and steadier top-line execution over the next several years.
Negative Factors
Balance-sheet Leverage
Material leverage (~1.0x D/E) reduces financial flexibility during downturns or rate shocks and limits the firm’s ability to opportunistically fund large programs or M&A without adding risk. Sustained debt levels can increase interest sensitivity and constrain capital allocation choices over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog & Bookings
A $105B backlog and $20B quarterly bookings provide durable multi-year revenue visibility and production cadence. High book-to-bill signals persistent, contract-backed demand across programs, enabling planning, capacity investments and steadier top-line execution over the next several years.
Read all positive factors
Northrop Grumman Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Reveals profitability across different business units, highlighting which segments drive earnings and where the company might need to improve efficiency or focus investment.
Reveals profitability across different business units, highlighting which segments drive earnings and where the company might need to improve efficiency or focus investment.
Data provided by:
The Fly
The FlyNorthrop Grumman (NOC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$77.07B
Dividend Yield1.73%
Average Volume (3M)1.04M
Price to Earnings (P/E)17.2
Beta (1Y)0.25
Revenue Growth5.90%
EPS Growth16.00%
CountryUS
Employees95,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)31.54
Shares Outstanding142,063,020
10 Day Avg. Volume1,082,148
30 Day Avg. Volume1,036,232
Financial Highlights & Ratios
PEG Ratio7.41
Price to Book (P/B)4.91
Price to Sales (P/S)1.95
P/FCF Ratio24.74
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$640.00Price Target Upside18.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)28.75
Revenue Forecast (FY)$44.06B
Northrop Grumman Business Overview & Revenue Model
Company Description
Northrop Grumman Corporation is a leading global player in the aerospace and defense sectors. Its Aeronautics Systems division is responsible for the full lifecycle of aircraft, from design and development to production, integration, and ongoing m...
How the Company Makes Money
Northrop Grumman makes money primarily by selling aerospace and defense products and related services under contracts—predominantly with the U.S. government (especially the U.S. Department of Defense) and U.S. intelligence and civil agencies, and ...
Northrop Grumman Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive operational and financial outlook: strong bookings ($20B), record $105B backlog (up 17% YoY), raised 2026 sales and EPS guidance, robust segment execution (notably Aeronautics and Mission Systems), and meaningful international and missile-production opportunities. Near-term challenges were acknowledged — primarily two unfavorable EAC adjustments (GEM 63XL and SAW) that pressured DS and Space margins, timing/restructuring impacts on HALO, microelectronics softness, and elevated CapEx to expand capacity. Management outlined corrective actions and reiterated confidence in second-half margin improvement and multi-year demand, resulting in highlights materially outweighing the lowlights.Positive Updates
Strong bookings and record backlog
Net awards of $20.0B in Q2 drove a book-to-bill of 1.84x for the quarter and a record backlog of $105B (up 17% year-over-year). Company now expects a full-year book-to-bill of at least 1.25x.
Negative Updates
Unfavorable EAC adjustments impacting margins (GEM 63XL & SAW)
Two programs drove negative EAC adjustments in Q2: GEM 63XL (Space) and Stand‑In Attack Weapon (SAW) in DS. DS reported a $68M unfavorable EAC on SAW; Space had an unfavorable EAC related to GEM 63XL material and quantity estimates, contributing to lower operating margin rates in DS and Space.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong bookings and record backlog
Net awards of $20.0B in Q2 drove a book-to-bill of 1.84x for the quarter and a record backlog of $105B (up 17% year-over-year). Company now expects a full-year book-to-bill of at least 1.25x.
Read all positive updates
Company Guidance
Management raised 2026 guidance and signaled accelerating second‑half momentum: full‑year sales are guided to $43.75–$44.25B (midpoint $44B, >5% organic growth) with a book‑to‑bill of at least 1.25x, adjusted EPS was increased by $1.20 to $28.60–$29.10 (effective tax rate mid‑14%), and adjusted free cash flow is reaffirmed at $3.1–$3.5B (including several hundred million of accelerated B‑21 proceeds); Q2 highlights that underpin the guide included $20B of net awards (Q2 book‑to‑bill 1.84x), record backlog of $105B (including a $7.6B Sentinel definitization), Q2 sales of $10.9B (+10% sequential, +5% YoY), Q2 EPS of $7.68, Q2 adjusted FCF nearly $1B and Q2 CapEx $320M. Segment-level 2026 expectations are: Aeronautics ~ $14B sales with mid‑to‑high‑9% margin, Defense Systems mid‑to‑high‑$8B sales at ~10% margin (H2 >11% ex‑EACs), Mission Systems high‑$12B sales at ~15% margin, Space ~ $11B sales at low‑10% margin; company CapEx is expected to be $1.85B in 2026 and ~4.5% of sales in 2027–28, intersegment eliminations ~ $2.7B (intersegment OM ~ mid‑13%), and management reiterated confidence in delivering the updated sales, margin and EPS targets despite two unfavorable EAC adjustments.Northrop Grumman Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
73
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 42.89B | 41.95B | 41.03B | 39.29B | 36.60B | 35.67B |
| Gross Profit | 8.60B | 8.31B | 8.36B | 6.55B | 7.47B | 7.27B |
| EBITDA | 7.08B | 7.21B | 6.84B | 4.23B | 7.68B | 8.73B |
| Net Income | 4.50B | 4.18B | 4.17B | 2.06B | 4.90B | 7.00B |
Balance Sheet | ||||||
| Total Assets | 50.76B | 51.38B | 49.36B | 46.54B | 43.76B | 42.58B |
| Cash, Cash Equivalents and Short-Term Investments | 2.31B | 4.40B | 4.35B | 3.11B | 2.58B | 3.53B |
| Total Debt | 16.29B | 19.74B | 20.19B | 17.94B | 16.82B | 16.25B |
| Total Liabilities | 32.88B | 34.70B | 34.07B | 31.75B | 28.44B | 29.65B |
| Stockholders Equity | 17.88B | 16.67B | 15.29B | 14.79B | 15.31B | 12.93B |
Cash Flow | ||||||
| Free Cash Flow | 3.65B | 3.31B | 2.62B | 2.10B | 1.47B | 2.15B |
| Operating Cash Flow | 5.08B | 4.76B | 4.39B | 3.88B | 2.90B | 3.57B |
| Investing Cash Flow | -1.33B | -1.16B | -1.75B | -1.58B | -1.24B | 2.06B |
| Financing Cash Flow | -3.34B | -3.55B | -1.40B | -1.76B | -2.61B | -7.00B |
Northrop Grumman Technical Analysis
Positive
542.24
Price Trends
535.20
Positive
586.92
Negative
602.95
Negative
Market Momentum
1.39
Negative
54.13
Neutral
67.64
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 542.24 is above the 20-day moving average (MA) of 534.81, above the 50-day MA of 535.20, and below the 200-day MA of 602.95, indicating a neutral trend. The MACD of 1.39 indicates Negative momentum. The RSI at 54.13 is Neutral, neither overbought nor oversold. The STOCH value of 67.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOC.
Northrop Grumman Risk Analysis
Northrop Grumman disclosed 21 risk factors in its most recent earnings report. Northrop Grumman reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Northrop Grumman Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $103.74B | 23.06 | 17.41% | 1.60% | 9.13% | 10.37% | |
76 Outperform | $134.49B | 21.38 | 86.24% | 2.34% | 7.20% | 52.79% | |
76 Outperform | $290.06B | 37.43 | 11.79% | 1.30% | 11.84% | 24.93% | |
70 Outperform | $77.07B | 17.20 | 26.58% | 1.73% | 5.90% | 16.00% | |
68 Neutral | $51.59B | 27.82 | 9.52% | 1.63% | 7.29% | 10.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
49 Neutral | $170.83B | 80.95 | 105.39% | ― | 24.78% | ― |
* Industrials Sector Average
NOC
Northrop Grumman
542.48
-38.17
-6.57%
BA
Boeing
216.14
-6.20
-2.79%
GD
General Dynamics
383.42
76.06
24.75%
LHX
L3Harris Technologies
277.06
3.44
1.26%
LMT
Lockheed Martin
582.74
170.17
41.25%
RTX
RTX
215.22
60.31
38.93%
Northrop Grumman Corporate Events
Executive/Board ChangesShareholder Meetings
Northrop Grumman Shareholders Back Board, Leadership and Auditor
Positive
May 21, 2026
At its 2026 Annual Meeting of Shareholders held on May 20, 2026, Northrop Grumman investors elected all eleven management-nominated directors, including chair and CEO Kathy J. Warden, and approved on an advisory basis the compensation of the compa...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.