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Investing.com - Bernstein SocGen Group has raised its price target on Northrop Grumman (NYSE:NOC) to $674.00 from $630.00 while maintaining a Market Perform rating on the defense contractor’s stock. The new target sits between the current analyst range of $524 to $769, with InvestingPro data showing the stock trading near Fair Value levels. The company, with a market cap of $85 billion, has demonstrated strong financial health with an overall score of 2.41 (FAIR).
The research firm identifies Northrop Grumman as a key beneficiary of the 2026 defense budget proposal, which more than doubles funding for both the Sentinel and B-21 programs compared to 2025 enacted levels. The TACAMO and E-2D programs also received budget increases. As a prominent player in the Aerospace & Defense industry, Northrop maintains a solid financial foundation with moderate debt levels and has consistently paid dividends for 55 consecutive years.
Bernstein expects Northrop to benefit from Golden Dome spending and notes the company’s strong alignment with Department of Defense strategic priorities through its involvement in nuclear deterrence, munitions, missiles, and space programs.
The upcoming third-quarter earnings call is expected to focus on progress with the Sentinel and B-21 programs, with a restructuring of Sentinel underway and process changes implemented on B-21.
Northrop’s Space Systems segment has faced challenges following the loss of the Next Generation Interceptor (NGI) contract and a classified program cancellation, raising questions about the company’s ability to capitalize on rising Department of Defense space budgets and Golden Dome opportunities. Despite these challenges, the company maintains strong profitability with a gross margin of 19.3% and return on equity of 27%. For deeper insights into Northrop Grumman’s performance and prospects, access the comprehensive Pro Research Report available on InvestingPro, which includes 10+ additional ProTips and detailed financial analysis.
In other recent news, Northrop Grumman has secured multiple defense contracts, highlighting its continued involvement in military projects. The company was awarded a $97.5 million contract for F-35 APG-85 radar components, which includes long lead time materials and parts to maintain the delivery schedule for the Air Force, Marine Corps, and Navy. Additionally, Northrop Grumman obtained contracts worth approximately $84.2 million for various military equipment and services, including a $32.6 million deal for 30MM chain-driven MK44 MOD4 guns.
Further contracts include a $48.4 million modification for counter-explosive device systems, part of which will support Australian military sales. Northrop Grumman also secured $67 million in Navy and Army contracts, with the largest being a $44.5 million order to enhance precision approach landing capabilities for the E-2D aircraft. In response to feedback from Ukrainian forces, the company is developing higher-caliber cannon bullets to counter drone swarms more effectively. These recent developments underscore Northrop Grumman’s active role in advancing military technology and supporting defense operations globally.
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