Northrop Grumman

NOC

Market cap $95.7B

Aerial refueling in test unlocks additional speed, flexibility in future operations Aerial refueling in test unlocks additional speed, flexibility in future operations

NOC approaches Q1 earnings with strong backlog and defense demand tailwinds, but B-21 cost risks and higher expenses could weigh on margins.

The U.S. defense sector is entering a new AI-driven revolution, with $1.5 trillion in proposed 2027 spending and $13.4 billion for autonomous systems. Rapid advances in cheap, smart, and autonomous weapons are fundamentally changing warfare economics and driving massive investment inflows into defense technology.

Northrop Grumman (NOC) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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Northrop Grumman (NOC) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Northrop Grumman is rated 'HOLD' due to significant overvaluation versus historical and sector norms. NOC's current 25x P/E is not justified by its 6-7% AEPS growth and 1.37% dividend, given sector headwinds and contract risks. MTM accounting increases volatility and obscures long-term financial health, especially amid cost overruns like the B-21 Raider program.

Shares of Lockheed and Northrop were lower early on Wednesday, after President Trump announced an Iran cease-fire on Tuesday.

We bought four “new” holdings in the quarter. Two of the four — Blackstone and Otis — we have owned before. In IT, we exited Oracle and trimmed Broadcom. Our five-year investment in Oracle proved highly profitable as the company transitioned its business model from licensing to software-as-a-service. On the semiconductor side, we modestly reduced our position in Broadcom to fund our new investment in Taiwan Semiconductor.

A defense ETF was down about 8% since the Iran war began. Investors are waiting to see what President Donald Trump does in Iran on Tuesday.