BofA has revised its price target for Northrop Grumman (NOC, Financial), reducing it from $585 to $550, while maintaining a Buy rating on the shares. This decision comes in the wake of a significant 12.7% drop in the stock price following Northrop's recent earnings announcement. A major factor in the decline was an unexpected pretax charge of $477 million related to the B-21 program, equivalent to $2.74 per share.
Despite the potential for further charges in the coming years, BofA believes the market may be undervaluing Northrop Grumman. The firm highlights that Northrop's portfolio is strategically positioned to meet essential defense priorities. Furthermore, BofA anticipates a strong chance that the Fiscal Year 2026 Presidential Budget Request will include provisions for additional B-21 units.
The adjusted price target also reflects anticipated reductions in near-term profitability for the B-21 program. However, the overall outlook remains optimistic, with the long-term strategic alignment of Northrop Grumman's offerings expected to bolster its performance in the defense sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Northrop Grumman Corp (NOC, Financial) is $553.16 with a high estimate of $625.00 and a low estimate of $480.00. The average target implies an upside of 19.19% from the current price of $464.08. More detailed estimate data can be found on the Northrop Grumman Corp (NOC) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Northrop Grumman Corp's (NOC, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Northrop Grumman Corp (NOC, Financial) in one year is $558.29, suggesting a upside of 20.3% from the current price of $464.08. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Northrop Grumman Corp (NOC) Summary page.
