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.
🚨 Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
