TLDR
- NOC fell ~2% after Q1 earnings despite beating EPS estimates of $6.03 with $6.14 and revenue of $9.88 billion, up 4.4% year-over-year
- Aeronautics sales jumped 17%, driven by the B-21 Raider entering low-rate initial production
- The Air Force agreed to expand annual B-21 production capacity by 25%
- Backlog stands at $96 billion, with $2.5 billion in planned B-21 facility investment through 2029
- Wall Street consensus is Moderate Buy, with an average price target of $743.33, implying ~29% upside
Northrop Grumman (NOC) reported a solid Q1 beat on April 21, but the stock still slipped around 2%. It’s the kind of reaction that makes you scratch your head — until you look at the details.
Northrop Grumman Corporation, NOC
Adjusted EPS came in at $6.14, ahead of the $6.03 consensus. Revenue hit $9.88 billion, up 4.4% from the same quarter last year and above the $9.75 billion estimate. On paper, that’s a clean beat.
The market’s hesitation appears tied to a $200 million increase in 2026 capital expenditure guidance and a $71 million unfavorable adjustment in the Space segment related to the GEM 63XL program. Neither is catastrophic, but investors noticed.
Aeronautics was the clear standout in the quarter. Sales climbed 17%, driven by the B-21 Raider moving into low-rate initial production. Margins in the segment recovered to 9.3%, partly because the loss charges that hit early 2025 didn’t repeat.
The Air Force also agreed to expand annual B-21 production capacity by 25%. That’s a concrete sign of demand, not a projection.
Defense Systems grew sales 5%, with the Sentinel intercontinental ballistic missile program continuing to ramp. Mission Systems revenue was relatively flat, but operating income rose 20%, helped by favorable contract adjustments.
B-21 Ramp Adds Revenue Visibility
Management said the company plans to invest $2.5 billion of its own capital into B-21 facilities through 2029. In the last two years, Northrop has opened more than 20 new facilities, a signal it’s building capacity to meet real demand.
The backlog sits at $96 billion. That’s roughly two to three years of forward revenue already locked in. FY2026 EPS guidance was set at $27.40–$27.90, which management kept largely unchanged after the quarter.
The stock is currently trading at around 21x the 2026 consensus EPS estimate of $27.93. The 52-week range runs from $453.01 to $774.00, and NOC opened Monday at $575.57 — below both its 50-day moving average of $699.43 and its 200-day of $638.36.
Analyst Ratings Remain Broadly Positive
Vanguard Group increased its position in NOC by 1.5% in Q4, bringing its stake to roughly 9.63% of the company.
On the analyst side, Royal Bank of Canada raised its price target to $750 with an Outperform rating. Deutsche Bank holds a Buy with a $765 target. UBS trimmed its target from $806 to $745 but kept a Buy. Citigroup also cut its target from $807 to $742, maintaining a Buy. Jefferies moved to a Hold.
The Wall Street consensus is Moderate Buy, based on 10 Buy ratings and five Holds. No analyst currently rates NOC a Sell. The average price target of $743.33 implies about 29% upside from current levels.
Northrop also declared a quarterly dividend of $2.31 per share, paid March 11, representing a $9.24 annualized yield of 1.6%.
The most recent insider activity saw CAO Michael Hardesty sell 147 NOC at $732.98 per share on February 19.
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