TLDR
- Wall Street expects Q1 EPS of $6.05 on revenue of $9.76 billion, up 3.1% year over year
- Analysts hold a Buy consensus with a mean price target of $736.24, implying ~11% upside from ~$665
- Key watch: margin expansion, with segment margins expected to recover to around 11%
- Recent contracts include a $475M Glide Phase Interceptor modification and the first engine run of the YFQ-48A Talon Blue drone
- NOC is down 2% over the past month, underperforming the broader aerospace and defense sector’s 10.3% gain
Northrop Grumman reports Q1 2026 earnings Tuesday before the bell. After years of heavy development spending, investors want to know one thing: is the margin recovery finally here?
Northrop Grumman Corporation, NOC
Wall Street is forecasting EPS of $6.05 and revenue of $9.76 billion. That’s a step down from Q4’s $7.23 EPS and $11.7 billion in revenue, but that’s normal. Defense contractors typically post their strongest numbers in Q4.
Year over year, revenue is expected to grow 3.1%. That would be a notable reversal from the 6.6% decline NOC posted in Q1 last year.
In the most recent quarter, Northrop beat on both revenue and operating income. Revenue came in at $11.71 billion, up 9.6% year on year. EPS hit $7.23, topping the $6.99 consensus. The one soft spot was full-year EPS guidance, which missed analyst expectations.
The stock is currently trading around $665ā$667, near the middle of its 52-week range of $450.13 to $774.00. Analyst price targets have been creeping higher. Wells Fargo initiated with a Buy and an $800 target on March 31. Deutsche Bank raised its target to $778 on April 8. Jefferies moved its Hold-rated target up to $710 on April 9.
EPS estimates have nudged up 0.51% over the past 60 days. Revenue estimates are up 0.24%. Modest, but the direction is positive.
Margin Recovery in Focus
The big question heading into Tuesday is whether margin expansion is actually showing up in the numbers. Analysts expect segment margins to recover to around 11%.
The Aeronautics segment is lapping a B-21 Raider development charge from last year, which should help. Mission Systems is expected to benefit from a better program mix. If both segments deliver, it would signal that Northrop’s investment-heavy phase is finally turning a corner.
Full-year EPS guidance is also on the radar. The current range is $27.40 to $27.90. Analysts expect management to reaffirm that range, though some think the bigger upside story plays out in 2027.
Recent Contract Wins Provide Backdrop
Northrop has had a busy April on the contract front. The company received a $475 million modification to accelerate its Glide Phase Interceptor program. Its YFQ-48A Talon Blue autonomous combat aircraft completed its first engine run on April 17. And the Sentinel ICBM program is advancing toward a first flight in 2027.
NOC is down about 2% over the past month. The broader aerospace and defense sector is up 10.3% in the same period, making Northrop one of the weaker performers in its peer group heading into earnings.
Peers have already started reporting. AAR posted 24.6% revenue growth and beat estimates, with its stock jumping 9.9%. Byrna grew 10.9% but missed, falling 38.3%.
Analysts have largely held their estimates steady over the last 30 days, suggesting no major surprises are expected either way.
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