Stock Price & Analysis

Based on the provided data and recent market activity, Northrop Grumman (NOC) stock appears to be a strong buy opportunity at current levels. Here's why:

Recent Price Action & Technical Analysis

The stock has shown strong momentum after receiving an upgrade from Citigroup on January 21, 2025, breaking out above key moving averages. The stock closed at $504.45 with a significant 4.58% gain during regular market hours.

Catalyst & Fundamental Drivers

1. Analyst Upgrade: Citigroup upgraded NOC from Neutral to Buy with a $587 price target, representing approximately 16.4% upside potential. The upgrade was based on:

• Compelling valuation after 15% selloff since November
• Strong visibility from NOC's key role in U.S. nuclear deterrence modernization
• Better-than-feared defense budgets outlook

2. Industry Tailwinds: The defense sector is experiencing strong tailwinds due to:

• Rising global defense spending
• Persistent elevated geopolitical tensions
• NATO countries likely increasing defense spending from 2% to 3% of GDP

Financial Performance & Outlook

• Free cash flow growth is expected to exceed 15% annually through 2026
• Strong backlog of $84.8 billion provides revenue visibility
• Operating margins have shown improvement, with potential for further expansion

Buy Recommendation Rationale

• Current technical indicators show positive momentum with breakout above 50-day moving average
• Valuation appears attractive after recent pullback
• Strong fundamental backdrop with increasing defense budgets
• Clear catalysts with analyst upgrades and improving business metrics

Target Price: $556-587 range, representing 10-16% upside potential from current levels.

Based on the provided data and recent market analysis, here's the price prediction for NOC stock in 2025:

Northrop Grumman (NOC) is expected to reach $556 by mid-2025, driven by a significant technical breakout above key moving averages and a bullish upgrade from Citigroup. The stock's strong rally above the weekly cloud model support near $460 and positive momentum indicators suggest the three-month corrective phase has ended. By end of 2025, the stock could potentially reach $587, supported by better-than-expected defense budgets and the company's crucial role in U.S. nuclear deterrence modernization.

The S1 support level for NOC Stock is $462.61 ,The R1 resistant level for NOC Stock is $502.53.

As of the end of day on 2025-01-24, the price of NOC Stock was $497.99.

The target price for NOC Stock according to analyst rating is 558.50, with the highest price target at 643.00 and the lowest at 500.00. Analysts have a Moderate Buy rating on NOC Stock overall.

The market cap of NOC is $72.4B.

Based on the provided data and recent market activity, I'll analyze whether NOC is overvalued through five key sentences:

NOC's current valuation metrics show a P/E ratio of 32.57x and EV/EBITDA of 21.20x in Q3 2024, which are both significantly higher than its historical averages.

The stock has recently received a positive catalyst with Citi upgrading it to "Buy" from "Neutral" on January 21, 2025, maintaining a price target of $587, citing compelling valuation after a 15% stock decline since November and strong visibility from its role in U.S. nuclear deterrence modernization.

The company's fundamentals remain solid with Q3 2024 showing improved margins (operating margin at 21.07% and net margin at 10.26%) and steady revenue growth, though the high valuation multiples suggest the market may be pricing in significant future growth expectations.

Despite the recent upgrade and positive technical breakout above key moving averages, NOC's current trading price around $488 represents a premium valuation compared to historical levels and defense industry peers, suggesting it is moderately overvalued at current levels.

The stock's risk-reward profile appears unfavorable at current prices given the elevated valuation metrics, though strong defense spending tailwinds and the company's critical role in defense modernization provide some justification for the premium valuation.

Northrop Grumman Corporation is a global aerospace and defense technology company. The Company operates through four segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The Aeronautics Systems segment is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems for the United States Air Force, the United States Navy, and international customers. The Defense Systems segment is engaged in the design, development, production, integration, and production of advanced tactical weapons and missile defense solutions, and a provider of sustainment, modernization and training services for manned and unmanned aircraft and electronics systems. The Mission Systems segment is engaged in advanced mission solutions and multifunction systems. The Space Systems segment is engaged in the design, development, integration, production and operation of space, missile defense, launch and strategic missile systems.

Based on the available data and market analysis, here's the price prediction for NOC stock by 2030:

Northrop Grumman (NOC) stock is projected to reach $587-$615 by 2030, driven by its critical positioning in defense industry complex and strong growth in free cash flow exceeding 15% annually. The company's significant involvement in major defense programs, space defense exposure, and hypersonics development supports this bullish outlook.

The stock's current technical indicators and analyst consensus suggest a strong potential for upward momentum, with multiple analysts maintaining "Strong Buy" ratings and price targets ranging from $485 to $655, indicating confidence in NOC's long-term growth trajectory.

NOC has a total of 101000 employees.