Skip to Content

Northrop Grumman Corp NOC

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Ground-Based Strategic Deterrent Continues To Drive Northrop's Growth; FVE $334

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Northrop Grumman reported a strong first quarter. While operating results were somewhat obscured by a large noncash gain on its sale of an IT business, the underlying business continues to perform well. Sales grew 6.2%, and transaction-adjusted earnings per share grew 28% to $6.57 per share. Management repurchased $2 billion worth of shares, which reduced the diluted share count by about 3.0% this quarter, and we think this repurchase was mostly value-accretive as the firm was trading materially below our fair value for much of the quarter. We’re raising our fair value estimate for Northrop by about 1% to $334 per share, mostly due to a time value of money adjustment.

Read Full Analysis

Company Profile

Business Description

Northrop Grumman is a defense contractor that is diversified across short-cycle and long-cycle businesses. The firm’s segments include aeronautics, mission systems, defense services, and space systems. The company’s aerospace segment creates the fuselage for the massive F-35 program and produces various piloted and autonomous flight systems. Mission systems creates a variety of sensors and processors for defense hardware. The defense systems segment is a mix between a long-range missile manufacturer and a defense IT service provider. Finally, the company’s space systems segment produces various space structures, sensors, and satellites.

Contact
2980 Fairview Park Drive
Falls Church, VA, 22042
T +1 703 280-2900
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 97,000

Related

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.