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Northrop Grumman Corporation
S&P 500
$74.7B
Market Cap
19.6
P/E
3.20
PEG
14.8%
ROCE
26.2%
ROE
1.07
D/E
12.8%
OPM
-31.8%
% from 52W High
36
α RS
🔍 NOC is showing a high-conviction setup because it matches 6 of 39 tracked screener presets, Sector RRG has Industrials in the Improving quadrant with the trail still strengthening, and magic_formula preset's Backtest win rate is 52.5% over 90 days. Net: Broad signal stack, not a recommendation. ? Conviction RRG Backtest
Sources
Conviction 6/39 · Industrials in Improving quadrant · Backtest win rate 52.5%
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🌏 Global Investor Returns
Currency-adjusted total returns for NOC including FX impact
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
📊 Sector Averages
About

Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. It operates through four segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The Aeronautics Systems segment designs, develops, produces, integrates, sustains, and modernizes aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic, surveillance and reconnaissance systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, integrates, and produces strategic deterrent systems, tactical weapons, and missile defense solutions; and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. This segment also offers strategic missiles; integrated all-domain command and control systems; precision strike weapons; tactical solid rocket motors, and high-speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions, and advanced fuzes; and sustainment, operation, and modernization. The Mission Systems segment provides command, control, communication and computer, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; advanced communications and network systems; microelectronics; navigation and positioning sensors; maritime power, propulsion, and payload launch systems; cyber solutions; and intelligence processing systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; and launch vehicles and related propulsion systems. The company was founded in 1939 and is based in Falls Church, Virginia.

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📈 Growth Pattern
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Manager Shares Value % of Fund Period
Jim Simons Renaissance Technologies LLC 10.0K $6.8M 0.01% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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Good quarter Investor Presentation One-Pager? Q2 2026
Revenue
$10.9B
+5% YoY
Segment Operating Income
$1.16B
-5% YoY
Segment Operating Margin
10.6%
-1.2pp YoY
Net Income
$1.09B
-7% YoY
Backlog
$105B
+17% YoY
What Went Right
  • Record backlog of $105B, with $20B of net awards in Q2 and a 1.84x book-to-bill.
  • Raised FY26 sales guidance by $250M and EPS guidance by $1.20.
  • Aeronautics sales grew 13% to $3.52B with a 10.3% margin on B-21/TACAMO strength.
What to Watch
  • Defense Systems took a $68M unfavorable EAC on SiAW, dragging segment margin to 7.5%.
  • Space recorded an unfavorable EAC on GEM 63XL and margin fell to 8.6%; rest of portfolio was >11%.
  • HALO revenue is being restructured with NASA as Gateway plans change, reducing 2026 revenue.
Management Guidance
  • FY26 sales raised to $43.75B-$44.25B (midpoint $44B, >5% organic growth).
  • FY26 MTM-adjusted EPS raised to $28.60-$29.10 (up $1.20).
  • FY26 book-to-bill expected at least 1.25x.
  • FY26 adjusted free cash flow reaffirmed at $3.1B-$3.5B; capex $1.85B.
  • Q3 revenue growth expected mid-to-high single digits YoY.
Investor Lens
The bull case is stronger after this call: record backlog and a raised full-year outlook point to accelerating revenue, while international traction (NATO Triton, Kuwait IBCS, PAC-3 SRM) supports multi-year growth. The two EAC hits are contained but show that qualification risk remains in missile and propulsion programs. If H2 margin recovers as guided (DS/Space ~11% ex-items), margin expansion plus backlog conversion should drive EPS higher. Key watch item is execution on SiAW and GEM 63XL rather than demand.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Record backlog and raised guidance; Q2 sales up 5% to $10.9B
Revenue
Sales rose 5% YoY to $10.9B, with growth in all four segments and 10% sequential growth. Aeronautics led with +13%, while DS, MS and Space grew 5%, 3% and 4%, respectively.
Profitability
Net income was $1.09B, down 7% YoY, with diluted EPS of $7.68. Prior-year EPS benefited by $1.04 from the training services divestiture; excluding that, EPS increased $0.57.
Margins
Segment operating margin fell 120bps to 10.6%. DS margin was 7.5% due to a $68M SiAW EAC, and Space margin was 8.6% due to GEM 63XL; excluding those, both segments were ~11%.
Balance Sheet
Q2 adjusted free cash flow was $978M, up from $637M a year ago, with capex of $302M. FY26 adjusted FCF guidance is reaffirmed at $3.1B-$3.5B.
Key Risks
Management flagged SiAW qualification cost growth, GEM 63XL component redesign/delivery timing, and NASA's HALO contract restructuring as near-term drags. The company also noted outer-year FCF guidance will be refined later in 2026.
Outlook
FY26 sales guidance was raised to $43.75B-$44.25B and MTM-adjusted EPS to $28.60-$29.10. Q3 sales growth is expected to be mid-to-high single digits YoY.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-07-21
Q2 2026 saw 5% sales growth, record $105B backlog, and robust bookings, with all segments contributing. Guidance was raised for sales and EPS, driven by strong demand, international momentum, and key program wins, despite margin pressure from select programs.
Q1 2026 Q1 2026 2026-04-21
Q1 2026 delivered strong sales growth, margin improvement, and robust backlog, driven by modernization programs like B-21 and Sentinel. Guidance for 2026 is reaffirmed, with accelerating sales and continued investment in capacity to meet rising global defense demand.
Q4 2025 Q4 2025 2026-01-27
Record backlog and strong sales growth in 2025, with free cash flow up 26% year-over-year. 2026 guidance calls for mid-single-digit sales growth, continued margin expansion, and increased capital investment, with momentum expected to accelerate into 2027.
Q3 2025 Q3 2025 2025-10-21
Q3 saw strong sales, margin, and cash flow growth, with robust program execution and international demand. Guidance for 2025 was revised down due to award delays, but 2026 outlook remains positive with balanced segment growth and continued investment in innovation.
Q2 2025 Q2 2025 2025-07-22
Q2 saw strong revenue, margin, and EPS growth, with all segments contributing and international sales up 18% year-over-year. Guidance for operating income, EPS, and free cash flow was raised, supported by robust demand, major program funding, and continued capital returns to shareholders.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
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Information Sources:
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