Northrop Grumman Corporation NOC
Northrop Grumman trades at 17.30x trailing P/E — a 39.5% discount to the defense-industrial peer median of 28.59x — while operating margins have recovered from a 2023 trough of 6.46% to 10.2% in 2025 and free cash flow has grown from $2.10B to $3.31B over the same two-year period. The company's record $105B backlog provides multi-year revenue visibility as geopolitical tensions fuel a global defense spending boom, with CEO Kathy Warden describing the company as being on a 'wartime footing.' The stock's pullback to $545.57 with RSI at 45.04 offers a less technically extended entry than recent levels, though the bearish MACD histogram of -4.52 and position below the 200-day moving average of $603.72 indicate the downtrend is not yet broken.
What could go wrong
- Revenue growth deceleration. YoY revenue growth has slowed from 7.34% in 2023 to 4.44% in 2024 to 2.24% in 2025, raising questions about whether the backlog will convert at attractive margins.
- Technical downtrend intact. Stock at $545.57 sits below the 200-day MA of $603.72 with a deeply negative MACD histogram of -4.52, signaling bearish momentum has not reversed.
- Smart money fading. Smart money score turned slightly negative at -0.0264 as of 2026-06-30, with fund count declining from 65 to 61 quarter-over-quarter.
- Gross margin pressure. Gross margin contracted from 20.38% in 2024 to 19.81% in 2025, suggesting cost pressures or mix shifts could constrain future profitability.
What would change my mind
Where this comes from: peer_relative · FMP fundamentals FY2025 · derived_metrics and FMP fundamentals FY2023 · Seeking Alpha (news, 2026-08-25). Orin's read on NOC; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All NOC filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 8-K | 21 Aug | Northrop Grumman Corporation granted Chair, CEO, and President Kathy J. | read |
| 13G/A | 12 Aug | — | on file |
| 10-Q | 21 Jul | Total sales for the three months ended June 30, 2026, were $10.876 billion, an increase of 5.0% year-over-year from $10.351 billion. | read |
| 8-K | 21 Jul | Northrop Grumman Corporation reported its second quarter 2026 financial results on July 21, 2026. | read |
| 8-K | 21 May | Northrop Grumman Corporation shareholders approved three management proposals at the May 20, 2026 Annual Meeting. | read |
| 13G/A | 14 May | — | on file |
| DEFA14A | 13 May | — | on file |
| 13G | 30 Apr | — | on file |
Largest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| State Street | $6.7B | 0.2% of fund |
| Vanguard Capital Management | $4.6B | 0.1% of fund |
| Capital World Investors | $2.6B | 0.3% of fund |
| Wellington Management Group Llp | $2.5B | 0.4% of fund |
| Vanguard Portfolio Management | $1.8B | 0.1% of fund |
| Morgan Stanley | $1.8B | 0.1% of fund |
109 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 184 Form 4 filings, net −$52.6M. Of the 50 on hand, 0 were open-market purchases and 18 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about NOC
Orin answers questions about NOC from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 16.1× | 17.3× | 44.5× |
| EV/EBITDA | 11.6× | 12.9× | — |
| P/S | 1.69× | 1.81× | — |
| P/B | 4.0× | 4.8× | — |
Its P/E sits 20th percentile of its own last 5 years (−0.38σ from its own mean).
8.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.3B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$618
$500 – $745 · +21% against today's price
- 20 buy or overweight
- 14 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| NOCNorthrop Grumman Corporation | $72B | 16.1× | 11.6× | 20.1% | 10.5% | 27% |
| EMREmerson Electric Co. | $87B | 34.0× | 19.3× | 53.2% | 13.8% | 13% |
| GDGeneral Dynamics Corporation | $91B | 20.2× | 14.9× | 15.4% | 8.2% | 17% |
| HWMHowmet Aerospace Inc. | $92B | 49.1× | 34.8× | 34.4% | 20.5% | 34% |
| ITWIllinois Tool Works Inc. | $78B | 24.6× | 18.8× | 44.2% | 19.4% | 102% |
| LHXL3Harris Technologies, Inc. | $44B | 23.9× | 14.5× | 25.5% | 8.2% | 9% |
| LMTLockheed Martin Corporation | $121B | 19.2× | 14.0× | 11.8% | 8.2% | 86% |
| MMM3M Company | $86B | 29.6× | 17.6× | 39.4% | 11.9% | 77% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| UPSUnited Parcel Service, Inc. | $78B | 17.1× | 9.6× | 16.6% | 5.1% | 29% |
| WMWaste Management, Inc. | $83B | 29.3× | 14.1× | 35.0% | 11.1% | 29% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 40.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $1032 | $545.41 · +89% | 2026-06-10 |
| Levered DCF | $896 | $545.41 · +64% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.