Northrop Grumman Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Northrop Grumman's Q3 2026 results — revenue of $11.12B (+6.7% YoY) and EPS of $7.89 beating estimates by ~9.9% — alongside raised full-year guidance and a record $109.6B backlog support a buy at $534.
At 16.2x trailing P/E versus the 22.5x peer median (~28% discount), NOC trades cheaply while operating margin has recovered to 10.2% in FY2025 from 6.5% in FY2023 and FCF margin expanded to 7.9%, with technicals showing momentum building above the 50-day MA ($524) and a positive MACD histogram, though the stock remains below the 200-day MA at $593. Institutional smart money has turned incrementally constructive, with the score improving from -0.00 in Q1 2025 to 0.05 as of Q2 2026 across 64 funds.
What could go wrong
- Political/budget risk. News flow on 20 Oct flags a potential Democratic sweep pricing into defense stocks; shifts in DoD procurement priorities or budget austerity could pressure backlog conversion and revenue growth.
- Persistent insider selling. Over the trailing 24 months, insiders executed 89 dispositions with zero open-market acquisitions, netting -56,697 shares (-$35.4M in value), a sustained bearish signal from management.
- Below 200-day moving average. Stock trades at $534 versus a 200-day MA of $593.47, indicating the longer-term downtrend remains unbroken despite recent momentum; RSI at 62.7 is approaching but not yet overbought.
- Gross margin erosion. Gross margin compressed from 20.4% in FY2024 to 19.8% in FY2025; further cost pressure on fixed-price contracts could offset operating leverage gains.
What would change my mind
Where this comes from: Q3 2026 results · earnings vs estimates, 20 Oct · news, 20 Oct · peer comparison, 20 Oct. Orin's read on NOC; not advice.
How has the share price moved?
Down 7.5% over twelve months, from $595.95 on 27 Oct 2025 to $551.23 at the Tue 27 Oct 2026 close. Its highest close in that time was $768.02 on 2 Mar 2026; the last close is 28.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 3.6M, on 8 Jan 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All NOC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| State Street | $6.7B | 0.2% |
| BlackRock | $6.0B | 0.1% |
| Vanguard Capital Management | $4.6B | 0.1% |
| Capital World Investors | $2.6B | 0.3% |
| Wellington Management Group | $2.5B | 0.4% |
| Vanguard Portfolio Management | $1.8B | 0.1% |
| Morgan Stanley | $1.8B | 0.1% |
| Franklin Resources | $1.7B | 0.4% |
| Geode Capital Management | $1.7B | 0.1% |
| Bank of America | $1.3B | 0.1% |
112 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 186 Form 4 filings; open-market trades net −$35.4M. Of the 50 on hand, 0 were open-market purchases and 17 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 →How is it priced, against its own past and its sector?
Priced at 17.4× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of its last 5 fiscal years (middle 17.3×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 17.4×near usual | 17.3× | 33.7× |
| P/S | 1.80×near usual | 1.81× | — |
| EV/EBITDA | 12.3×near usual | 12.9× | — |
| P/B | 4.2×below usual | 4.8× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $617 (from $430 to $745) — 12% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$617
$430 – $745 · +12% against the last close
- 11 buy or overweight
- 7 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 17.4× its last 12 months of profit; the middle P/E of the 6 companies it is compared to that made a profit is 21.7×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| NOCNorthrop Grumman Corporation | $78B | 17.4× | 12.3× | 20.0% | 10.4% | 26% |
| BAThe Boeing Company | $133B | 17.6× | 14.1× | 9.4% | 8.1% | 127% |
| GDGeneral Dynamics Corporation | $96B | 21.3× | 15.1× | 15.4% | 8.2% | 17% |
| HIIHuntington Ingalls Industries, Inc. | $11B | 16.7× | 11.7× | 12.6% | 5.0% | 13% |
| LHXL3Harris Technologies, Inc. | $48B | 26.0× | 14.5× | 25.5% | 8.2% | 9% |
| LMTLockheed Martin Corporation | $144B | 22.0× | 15.1× | 11.7% | 8.2% | 79% |
| RTXRTX Corporation | $263B | 31.2× | 17.4× | 21.1% | 8.9% | 13% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 17.4× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now17.4×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $844 a share — 52% above the $557.25 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $844 | 52% above $557.25 |
| Levered | $729 | 31% above $557.25 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.