Northrop Grumman Corporation (NYSE: NOC) has quietly outperformed defense peers, rising about 18% over the past year to around $606/share. The company’s stability, strong cash flow, and major defense programs have fueled steady gains, though analysts now expect slower growth ahead.
Northrop Grumman recently reached a key milestone in its B-21 Raider program as the second test aircraft joined the flight test campaign at Edwards Air Force Base in September 2025. The company is also advancing its missile defense work through new target vehicle production for the Next Generation Interceptor program, supporting upcoming flight test demonstrations and reinforcing its position in advanced aerospace and defense technology.
This article explores where Wall Street analysts think Northrop could trade by 2027. We’ve pulled together consensus targets and TIKR’s Guided Valuation Model to outline the stock’s potential path. These figures reflect current analyst expectations and are not TIKR’s own predictions.
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Analyst Price Targets Suggest Limited Upside
Northrop Grumman trades at about $606/share today. The average analyst price target is $647/share, which points to roughly 7% upside over the next year. Forecasts remain fairly tight, showing moderate confidence in the outlook:
- High estimate: ~$770/share
- Low estimate: ~$533/share
- Median target: ~$673/share
- Ratings: 8 Buys, 2 Outperforms, 10 Holds
It seems analysts see a bit of upside but not a major breakout ahead. For investors, that means Northrop may keep delivering steady returns driven by its defense programs, but expectations for explosive growth are limited.
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Northrop Grumman: Growth Outlook and Valuation
The company’s fundamentals look healthy but mature:
- Revenue is projected to grow around 4% annually through 2027
- Operating margins expected near 11%
- Shares trade around 19x forward earnings, roughly in line with historical averages
- Based on analysts’ average estimates, TIKR’s Guided Valuation Model using an 18.7x forward P/E suggests around $640/share by 2027
- That points to about 6% total upside, or roughly 2.6% annualized returns
These figures show that Northrop’s value lies in consistency, not speed. For investors, it looks like a dependable compounder that can preserve capital and generate moderate returns, making it more of a long-term defensive hold than a growth play.
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What’s Driving the Optimism?
Northrop continues to benefit from strong U.S. defense spending and long-term contracts across key programs like the B-21 Raider stealth bomber and the Next Generation Interceptor. These projects give the company years of earnings visibility and strengthen its role as a key defense partner.
Management has also improved cost control and supply chain efficiency, helping preserve margins despite inflation pressures. Growing demand for advanced aerospace systems and missile defense solutions supports a steady revenue pipeline.
For investors, These strengths show why Northrop remains one of the most reliable names in defense. The company’s mix of government-backed programs and disciplined execution provides consistent cash flow and predictable returns, even in uncertain markets.
Bear Case: Valuation and Growth Limits
Even with solid fundamentals, Northrop’s valuation already reflects much of its recovery. The stock trades near 19x forward earnings, roughly in line with its historical average, which leaves little room for multiple expansion. Revenue growth is expected to slow to around 4% per year, and margins are likely to remain steady rather than expand further.
For investors: The main risk is that earnings growth could flatten if new contract awards or cost savings fall short of expectations. With only a 1.6% dividend yield, income appeal is limited. Northrop’s current setup favors long-term stability over aggressive upside.
Outlook for 2027: What Could Northrop Be Worth?
Based on analysts’ average estimates, TIKR’s Guided Valuation Model using an 18.7x forward P/E suggests NOC could trade near $640/share by 2027. That implies about 6% total upside, or roughly 2.6% annualized returns from current levels.
This outlook signals that much of Northrop’s strength is already priced in. For meaningful upside, the company would need to outperform through stronger order growth, faster B-21 production, or improved cash conversion.
For investors, Northrop looks like a high-quality, defensive compounder built for consistency rather than rapid appreciation. The stock suits those seeking predictable returns from a stable defense leader, not those chasing double-digit gains.
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