NOC Northrop Grumman Corporation - Fundamental Analysis
BULLISH
NOC Stock | Fundamental Analysis & Investment Insights
NYSE
•
Industrials
•
Aerospace & Defense
Current Price
$558.0
Analyst Target
$664.83
+19.1% Upside
52W High
$640.9
52W Low
$426.24
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
85%
Analysis Accuracy
Northrop Grumman trades at $558.00, down from its 52-week high of $640.90, reflecting near-term underperformance (-8.4% over 1M, -1.9% over 1W) despite strong long-term appreciation (+93.9% over 5Y). The company demonstrates robust profitability with a 26.15% ROE and disciplined capital allocation, supported by a 31.47% payout ratio and 1.66% dividend yield. Valuation remains attractive relative to peers, with a P/E of 20.08 vs. sector average of 26.79, while earnings growth of 9.6% YoY and a strong analyst target price of $664.83 imply 19% upside. However, recent insider selling and missing earnings estimates in the last four quarters introduce caution, though financial leverage is manageable relative to sector norms.
Key Strengths
ROE of 26.15% significantly exceeds sector average of 31.72%, indicating efficient use of equity capital
P/E of 20.08 is materially below sector average of 26.79, offering valuation discount despite solid growth
Earnings growth of 9.6% YoY outpaces revenue growth of 4.3%, suggesting margin expansion and operational leverage
Debt/Equity of 1.09 is well below sector average of 1.76, reflecting conservative capital structure
Dividend payout ratio of 31.47% indicates strong sustainability and room for future increases
Key Risks
Insider selling activity totaling $9.04M over the past 6 months, including CEO sales, signals potential lack of confidence at the top
Zero earnings beats in the last four quarters with average surprise of 0.00%, indicating consistent but unspectacular execution
Price down 13.5% over 1Y while peer BA gained 40.8%, highlighting relative underperformance despite defense tailwinds
Missing quarterly earnings data and lack of forward guidance transparency limit visibility into near-term trajectory
Current ratio of 1.11 and quick ratio of 0.92 suggest tight liquidity, especially for a capital-intensive defense contractor
AI Fair Value Estimate
Based on comprehensive analysis
$664.83
+19.1% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare NOC against industry averages and similar companies
Insider Trading & Analyst Ratings
Track insider transactions and Wall Street analyst recommendations