Northrop Grumman has a strong focus on producing hardware for classified programs and currently enjoys exposure to some hefty military development programs that are early in their life cycle.
NOC is trading within a range we consider fairly valued.
Price
$435.77
Fair Value
$599.00
Uncertainty
Medium
1-Star Price
$831.62
5-Star Price
$812.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say
Bulls
Northrop Grumman has won the Ground Based Strategic Deterrent and B-21 bomber programs, both of which should drive material top-line growth over the next few decades.
Bears
Northrop Grumman depends on U.S. military funding for its sales, which is an inherently political and thus uncertain process.
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Northrop Grumman is a diversified defense contractor providing aeronautics, defense, and space systems. The company’s aerospace segment creates the fuselage for the massive F-35 program and produces autonomous and piloted aircraft such as Global Hawk drones and the new B-21 bomber. Defense systems makes artillery and missile ammunition and guidance systems, missile defense systems, and conducts maintenance and upgrades on numerous military aircraft. Mission systems creates and integrates a variety of radar, navigation, and communication systems for avionics, weapons control, and countermeasures on a range of platforms from helicopters to destroyers. Finally, space systems produces satellites, sensors, space structures, and manufactures long-range missiles and rocket motors.