Northrop Grumman (NOC)
The desk's stance
On our research list, not on the slate.
What the company does
The B-21 stealth bomber, nuclear missiles (Sentinel), and military space — the quietest prime with the longest-duration programs.
In short: Aerospace and defense systems technology. Category: Large-Cap Defense Prime. Sector: Industrials, Aerospace & Defense.
G-Street Value and Score
G-Street Value: $562.84, computed Oct 18, 2026 (confidence: high).
How we got there: 70% analyst leg $562.84 (3 analyst targets, credibility- and freshness-weighted, after 8% optimism discount) + 30% GainStreet factor value $704.15 (23.19× fwd EPS anchored to aerospace-defense multiples) — capped at the analyst leg; factors never out-bull the street. 2 analyst targets have no linked source and are shown but not counted.
G-Street Score: 36 out of 100 (Weak).
- Top-line growth & guidance: 7 of 32
- Margin power: 0 of 15
- Revenue visibility & quality: 6 of 11
- Profitability & balance sheet: 16 of 24
- Capital allocation & governance: 5 of 6
- Valuation, sentiment & momentum: 2 of 12
Our current thesis
Updated Oct 11, 2026
The thesis
- Record $104.7B backlog offers multi-decade visibility across B-21 bomber and Sentinel ICBM programs.
- Valuation multiple compressed to 15.8x forward P/E, trading at a steep peer discount.
- Q2 adjusted free cash flow jumped 54% to $978M, supporting steady balance-sheet deleveraging.
Risks
- Top-line 5% growth lags prime peers RTX and LMT while fixed-price execution challenges linger.
- EAC cost adjustments on missile and space development programs compress segment operating margins.
- Loss of Navy F/A-XX development program creates long-term tactical fighter franchise headwind.
What we're watching
- Q3 2026 earnings on October 20, 2026 for segment margins and cash conversion.
- Technical support test at 52-week low of $470 and psychological $500 level.
- B-21 low-rate initial production milestones and potential DoD procurement lot expansion.
Latest
NOC trades near its 52-week low of $470 at 15.8x forward P/E following broad defense multiple de-rating and Navy F/A-XX contract loss. Operationally, Q2 2026 sales rose 5% YoY to $10.88B with EPS beating consensus at $7.68, driving raised full-year guidance. Total backlog reached a record $104.7B on $20B of quarterly net awards, supporting multi-decade nuclear triad modernization visibility.
Key numbers
As of Oct 16, 2026: market cap $73.9B · revenue growth +5.1% year over year · gross margin 20.1% · net margin 10.5% · forward P/E 17.1 · next earnings Oct 20, 2026.
Analyst price targets
Published analyst targets we could trace to a named source.
- UBS, Buy: $704 target (September 2026). Source: marketbeat.com
- RBC Capital, Hold: $525 target (October 2026). Source: marketbeat.com
- Guggenheim, Buy: $612 target (September 2026). Source: investing.com
On the Gainz Lab maps
Who it does business with
- Kratos competes with Northrop Grumman — Drone wingmen. Kratos’ cheap Valkyrie drones compete for the collaborative combat aircraft mission.
- Lockheed Martin competes with Northrop Grumman — Aircraft & space programs. Stealth aircraft and military space contracts flow to one or the other.