Key Stats for Northrop Grumman Stock
- Past-Week Performance: +3%
- 52-Week Range: $450.1 to $745.6
- Current Price: $724.4
What Happened?
Northrop Grumman stock (NOC) sits just 2.9% below its 52-week high of $745.55, trading at $724.38, after setting a new company record of $95 billion in backlog driven by $46 billion in net awards during 2025, signaling that institutional money is treating NOC as a structural defense winner, not a cyclical bet.
Specifically, the January 27 Q4 earnings call delivered the decisive trigger, as Northrop reported free cash flow of $3.3 billion for 2025, a 26% increase versus the prior year and its third consecutive year of at least 25% free cash flow growth, reinforcing analyst conviction in the stock’s upward trajectory.
Underneath that cash flow story, the mechanical engine is B-21 Raider production acceleration, with funding already approved through the reconciliation bill, LRIP Lot 3 awarded and Lot 5 advance procurement secured in Q4, and Aeronautics segment sales jumping 18% year-over-year to $3.9 billion in the quarter.
Consequently, the market is actively re-rating Northrop from a steady legacy defense contractor into a high-velocity capacity-expansion story, as Defense Systems became the fastest-growing segment with low double-digit organic growth guided for 2026 and international sales already surging 20% in 2025.
Chair, CEO, and President Kathy Warden stated on the Q4 earnings call that “this is the most robust demand environment I’ve seen in my career,” contextualizing Northrop’s decision to increase 2026 capital expenditures to $1.65 billion as the company races to triple solid rocket motor capacity and accelerate B-21 production rates simultaneously.
Further supporting that conviction, Argus Research raised its price target to $785 from $625 on February 10, reflecting institutional recognition that Northrop’s combination of a record $95 billion backlog, 150 SDA satellite contracts, and the YFQ-48A autonomous wingman designation positions the company across every high-priority defense spending vector simultaneously.
Looking out three to five years, Northrop’s simultaneous dominance in B-21 stealth production, hypersonic missile defense via IBCS, autonomous combat aircraft through Project Talon, and space security assets positions it to compound its competitive moat precisely as the proposed $1.5 trillion FY2027 U.S. defense budget resets the ceiling for what defense revenue can look like.
Wall Street’s Take on NOC Stock
Northrop’s record $95 billion backlog and B-21 acceleration approval directly confirm the 4.6% revenue growth forecast for 2026, making the forward earnings trajectory more visible than at any prior point.
Meanwhile, revenue grows from $41.9 billion in 2025 to $43.9 billion in 2026, while normalized EPS expands 5.3% to $27.74, confirming steady acceleration after 2025’s flat 1.0% EPS growth.
Nevertheless, Wall Street shows mixed conviction, with 8 buys, 3 outperforms, 11 holds, and 1 underperform among 23 analysts, anchoring a mean target of $724.39, essentially flat with the current $724.38 price.
The target spread runs from $587.22 on the low end to $815.00 on the high end, where the high scenario requires a confirmed B-21 acceleration contract and the low reflects B-21 delay risk materializing through 2026.
What Does the Valuation Model Say?
With B-21 acceleration funding already approved through reconciliation, TIKR’s mid-case model targets $802.78, delivering a 10.8% total return over 4.8 years at a 2.1% annualized IRR.
Regardless, the market is ignoring the compounding effect of Northrop’s $95 billion backlog converting into accelerating revenues through 2027 and 2028.
The mid-case model targets $802.78, implying 10.8% total upside from $724.38. Defense Systems alone guides to low double-digit organic growth in 2026, anchoring that return.
Addiotionally, Argus Research’s upgrade to $785 on February 10 confirms institutional analysts see the same inflection.
However, the single biggest risk is B-21 margin compression, as the program currently runs at 0% margin and the $2 billion to $3 billion acceleration investment will pressure near-term free cash flow guidance of $3.1 billion to $3.5 billion.
Watch for the B-21 acceleration contract agreement with the Air Force, which management targeted for Q1 completion and which determines whether 2027 revenue guidance steps up materially beyond current mid-single-digit projections.
In conclusion, at $724.38, NOC is fairly valued today with the mean analyst target at $724.39, making the B-21 acceleration contract the single event that tips the stock toward Argus Research’s $785 target or stalls it.
Should You Invest in Northrop Grumman Corporation?
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