Northrop Grumman (NOC)
NYSE:NOC
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Northrop Grumman
(NYSE:NOC)
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Rating:77Outperform
Price Target:
$770.00
▲(12.00% Upside)
Action:ReiteratedDate:02/14/26
The score is driven primarily by strong financial performance led by improving free cash flow and steady revenue/profitability, supported by bullish technical trends (price above key moving averages and positive MACD). Valuation is a constraint (P/E ~23 with a modest dividend yield), while the latest earnings call was broadly constructive with record backlog and favorable 2026 outlook but acknowledged program-timing and near-term margin-pressure risks.
Positive Factors
Free Cash Flow Strength
Sustained, multi-year free cash flow growth provides durable financial flexibility to fund capital investments, pension obligations, and prioritized shareholder returns. Consistent strong FCF underpins the firm's ability to invest in capacity and absorb multi-year program cash needs without relying on external financing.
Negative Factors
Margin Volatility
Historical margin swings and incomplete recent margin data create uncertainty about sustainable profitability. Continued development-heavy mix in Aeronautics and program-level variability can depress near-to-medium term margins, making long-term margin assumptions and operational leverage harder to rely on.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Sustained, multi-year free cash flow growth provides durable financial flexibility to fund capital investments, pension obligations, and prioritized shareholder returns. Consistent strong FCF underpins the firm's ability to invest in capacity and absorb multi-year program cash needs without relying on external financing.
Read all positive factors
Northrop Grumman (NOC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$97.57B
Dividend Yield1.55%
Average Volume (3M)817.18K
Price to Earnings (P/E)19.6
Beta (1Y)0.22
Revenue Growth-0.14%
EPS Growth72.35%
CountryUS
Employees97,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)7.23
Shares Outstanding141,921,620
10 Day Avg. Volume587,086
30 Day Avg. Volume817,184
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 Cap1.16
Enterprise Value/Revenue2.69
Enterprise Value/Gross Profit13.58
Enterprise Value/Ebitda15.67
Forecast
1Y Price Target
$754.47Price Target Upside9.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)28.01
Revenue Forecast (FY)$43.94B
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...
How the Company Makes Money
Northrop Grumman generates revenue primarily through government contracts, which account for a significant portion of its earnings. The company's revenue model is based on the provision of products, systems, and services that are often long-term c...
Northrop Grumman Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales across various divisions, showcasing which areas are growing and contributing most to the company's top line, indicating strategic strengths or weaknesses.
Breaks down sales across various divisions, showcasing which areas are growing and contributing most to the company's top line, indicating strategic strengths or weaknesses.
Data provided by:
The Fly
The FlyNorthrop Grumman Earnings Call Summary
Earnings Call Date:Jan 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Positive
The call emphasized multiple material positives: record backlog (~$95–$96B), strong Q4 and full-year performance with sales and EPS beating guidance, robust free cash flow growth (+26%), significant international momentum (+20%), and concrete investments to expand munitions and space capacity. Management provided prudent 2026 guidance that conservatively excludes potential upside from B-21 acceleration and other opportunities, noted timing risks for certain programs (Sentinel, Gen 63 cadence) and expects near-term margin pressure in Aeronautics due to development mix. On balance, the positive operational and financial momentum, healthy cash generation, and clear capacity investments outweigh the timing/conservatism risks, supporting an overall favorable outlook.Positive Updates
Record Backlog and Strong Awards
Backlog reached a new company record (noted as over $95 billion and later $96 billion) driven by roughly $46 billion in net awards in 2025 and nearly $20 billion backlog growth since 2021; five-year average book-to-bill of 1.1x.
Negative Updates
Conservative 2026 Guidance Excludes Potential Upside
2026 guidance ($43.5–$44.0 billion sales, mid single-digit growth) does not include potential B-21 production-rate acceleration or some other upside opportunities (e.g., Apex/FAXX), creating conservatism tied to timing risk of backlog conversion.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Backlog and Strong Awards
Backlog reached a new company record (noted as over $95 billion and later $96 billion) driven by roughly $46 billion in net awards in 2025 and nearly $20 billion backlog growth since 2021; five-year average book-to-bill of 1.1x.
Read all positive updates
Company Guidance
Northrop Grumman’s 2026 guidance (consistent with October and excluding any accelerated B‑21 production) calls for sales of $43.5–$44.0 billion (mid‑single‑digit growth) with Q1 up low single digits and growth accelerating through the year; segment operating income of $4.85–$5.0 billion (low‑ to‑mid‑11% segment operating margin); mark‑to‑market adjusted EPS of $27.40–$27.90 (up mid‑single digits) assuming an effective tax rate in the low‑ to‑mid‑17% range, $620 million of interest expense, and ~$280 million of other unallocated corporate expenses with a roughly flat share count. Free cash flow is expected at $3.1–$3.5 billion while capital expenditures rise to $1.65 billion (~4% of sales); segment-level guidance: Aeronautics Systems mid‑$13 billion in sales with low‑to‑mid‑9% margins, Defense Systems mid‑to‑high $8 billion with ~10% margins, Mission Systems high $12 billion with margins in the high‑14% range, and Space ≈$11 billion with ~11% operating margin; intersegment eliminations ~$2.4 billion (high‑13% OM). Management reiterated disciplined capital deployment—paying down a $527 million maturing note in March, limiting buybacks after January, dividend decision by the board in May—and noted pension/funding metrics: 2025 asset returns 11.3%, funding status 106%, and forecast cash recoveries of $245 million.Northrop Grumman Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 41.95B | 41.03B | 39.29B | 36.60B | 35.67B |
| Gross Profit | 8.31B | 8.36B | 6.55B | 7.47B | 7.27B |
| EBITDA | 7.21B | 6.84B | 4.23B | 7.68B | 8.73B |
| Net Income | 4.18B | 4.17B | 2.06B | 4.90B | 7.00B |
Balance Sheet | |||||
| Total Assets | 51.38B | 49.36B | 46.54B | 43.76B | 42.58B |
| Cash, Cash Equivalents and Short-Term Investments | 4.40B | 4.35B | 3.11B | 2.58B | 3.53B |
| Total Debt | 19.74B | 20.19B | 17.94B | 16.82B | 16.25B |
| Total Liabilities | 34.70B | 34.07B | 31.75B | 28.44B | 29.65B |
| Stockholders Equity | 16.67B | 15.29B | 14.79B | 15.31B | 12.93B |
Cash Flow | |||||
| Free Cash Flow | 3.31B | 2.62B | 2.10B | 1.47B | 2.15B |
| Operating Cash Flow | 4.76B | 4.39B | 3.88B | 2.90B | 3.57B |
| Investing Cash Flow | -1.16B | -1.75B | -1.58B | -1.24B | 2.06B |
| Financing Cash Flow | -3.55B | -1.40B | -1.76B | -2.61B | -7.00B |
Northrop Grumman Technical Analysis
Negative
687.47
Price Trends
709.17
Negative
646.86
Positive
606.81
Positive
Market Momentum
-6.68
Positive
43.85
Neutral
61.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOC, the sentiment is Negative. The current price of 687.47 is below the 20-day moving average (MA) of 703.03, below the 50-day MA of 709.17, and above the 200-day MA of 606.81, indicating a neutral trend. The MACD of -6.68 indicates Positive momentum. The RSI at 43.85 is Neutral, neither overbought nor oversold. The STOCH value of 61.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $97.57B | 19.57 | 26.50% | 1.55% | -0.14% | 72.35% | |
75 Outperform | $67.61B | 35.53 | 8.28% | 1.61% | 2.83% | 47.00% | |
75 Outperform | $273.13B | 36.54 | 10.62% | 1.44% | 8.79% | 39.63% | |
74 Outperform | $94.64B | 21.58 | 17.57% | 1.73% | 11.86% | 17.39% | |
74 Outperform | $144.61B | 22.26 | 80.53% | 2.77% | 2.88% | -35.15% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $171.05B | 74.05 | -94.94% | ― | 10.19% | -6.03% |
* Industrials Sector Average
NOC
Northrop Grumman
687.47
183.27
36.35%
BA
Boeing
217.80
56.98
35.43%
GD
General Dynamics
350.02
83.64
31.40%
LHX
L3Harris Technologies
361.97
151.23
71.76%
LMT
Lockheed Martin
628.50
178.55
39.68%
RTX
RTX
203.48
77.18
61.11%
Northrop Grumman Corporate Events
Business Operations and StrategyExecutive/Board Changes
Northrop Grumman refreshes board and executive incentive plans
Positive
Feb 13, 2026
On Feb. 12 and 13, 2026, Northrop Grumman expanded its board and refreshed its leadership structure, electing Admiral Christopher W. Grady, former vice chairman of the Joint Chiefs of Staff, as a director and appointing him to its Audit and Risk a...
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.