Update shared on06 Sep 2025
Fair value Increased 0.88%Analysts have raised Northrop Grumman’s price target to $603.32, citing accelerating revenue growth tied to Department of Defense priorities, robust international sales momentum, and strong Q2 performance, while valuation concerns and uncertainty around future earnings temper some optimism.
Analyst Commentary
- Bullish analysts highlight accelerating revenue growth projected for the second half of 2025, underpinned by alignment with Department of Defense budget priorities and management’s positive outlook.
- Continued double-digit international sales growth and expansion of the international backlog are seen as key long-term drivers, positioning Northrop Grumman as a top play on global defense spending.
- Robust Q2 profitability and strong sequential revenue growth, particularly from international demand and progress on critical programs like Sentinel and B-21, underpin multiple price target increases.
- Positive shifts in defense budget trends and expectations of an inflection point in sector performance post-Q2 reporting are contributing to bullish sentiment.
- Bearish analysts cite Northrop Grumman’s valuation premium relative to peers, lack of clear superiority in near- and medium-term EBIT growth, and concerns over potential negative estimate revisions following Q2 results as reasons for downgrades and lowered targets.
What's in the News
- President Trump is reinterpreting arms control rules to allow wider international sales of advanced U.S. military drones, potentially benefiting Northrop Grumman as one of the leading manufacturers in this field (Reuters, 2025-09-05).
- Northrop Grumman plans to quadruple its chip output by 2030, with its semiconductors integral to key military platforms such as F-16s, E-7 aircraft, Apache helicopters, G/ATOR radars, and various drones (Axios, 2025-08-13).
- China is restricting the supply of critical minerals crucial for Western defense production, impacting companies like Northrop Grumman due to potential delays and the need to secure alternative sources (WSJ, 2025-08-04).
- The U.S. defense budget request under President Trump targets increased procurement of high-tech missiles and drones, which could lead to greater contract opportunities for Northrop Grumman (Reuters, 2025-06-26).
- Boeing has appointed former Northrop Grumman strike division VP Steve Sullivan to lead the Air Force One (VC-25B) program, highlighting the mobility of top defense industry talent and Northrop's leadership impact (Breaking Defense, 2025-06-25).
Valuation Changes
Summary of Valuation Changes for Northrop Grumman
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $598.04 to $603.32.
- The Future P/E for Northrop Grumman remained effectively unchanged, moving only marginally from 23.01x to 23.22x.
- The Consensus Revenue Growth forecasts for Northrop Grumman remained effectively unchanged, moving only marginally from 5.4% per annum to 5.5% per annum.
Disclaimer
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