Key Takeaways Better-than-expected Q2 earnings, policy support and geopolitical tensions lift defense outlook.LMT, RTX and NOC delivered Q2 earnings beats, highlighting resilient defense demandETFs like ITA, XAR and PPA offer diversified exposure to the defense sector's strong outlook Geopolitical tensions have been a significant headwind for financial markets in 2026, with the conflict in the Middle East fueling uncertainty and volatility. Yet, the same backdrop has created a favorable environment for the defense sector, supported by expectations of higher military spending.
With military exchanges between Washington and Tehran becoming more intense, the risk of a broader regional conflict has increased. The concerns of a wider regional war have been reinforced after President Trump stated that a decision on launching a "massive attack" on Iran is imminent, as the Middle East conflict spread to the Red Sea, as quoted on CNBC.
The defense sector remains well-positioned in the current environment, as it has historically outperformed during periods of heightened geopolitical tensions and increased military activity. At the same time, President Trump has urged defense contractors to expand manufacturing capacity and increase weapons production.
The industry's outlook has been further strengthened by policy support. The U.S. House of Representatives advanced the fiscal 2027 National Defense Authorization Act (NDAA), authorizing a record $1.15 trillion in military spending, as per Reuters.
Adding to the positive backdrop, several defense companies delivered robust second-quarter 2026 earnings.
Earnings in FocusBelow, we have discussed in brief the second-quarter results of a few renowned U.S. Aerospace – Defense industry players.
Lockheed MartinLockheed Martin (LMT - Free Report) reported second-quarter 2026 adjusted earnings of $7.94 per share, which beat the Zacks Consensus Estimate of $7.22 by 10%. The bottom line increased 8.9% from the year-ago quarter's reported figure of $7.29.
Net sales were $20.06 billion, which beat the Zacks Consensus Estimate of $19.34 billion by 3.7%. The top line inched up 10.5% from $18.16 billion reported in the year-ago quarter. The year-over-year improvement was driven by higher sales growth registered by LMT’s business segments.
LMT’s backlog, as of June 28, 2026, was $230.42 billion compared with $193.62 billion as of Dec. 31, 2025. The Aeronautics segment accounted for $54.36 billion of the total backlog amount, while the Missiles and Fire Control segment contributed $87.88 billion. The Rotary and Mission Systems segment contributed $48.45 billion, while the Space unit accounted for $39.72 billion.
The company has a Momentum Score of A. LMT came up with second-quarter 2026 earnings on July 23, before market open and gained around 10.54% on the same day.
RTX CorporationRTX Corporation’s (RTX - Free Report) second-quarter 2026 adjusted earnings per share (EPS) of $1.89 beat the Zacks Consensus Estimate of $1.66 by 13.9%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.56.
Revenues rose 14.5% year over year to $24.71 billion and beat the consensus mark of $22.83 billion by 8.2%. Growth was supported by higher commercial aftermarket and defense demand. Organic sales advanced 16% in the quarter.
Backlog climbed 22% to $289 billion. The company secured $43 billion of new awards during the quarter, including nearly $20 billion at Raytheon. The total backlog comprised $170 billion of commercial orders and $119 billion of defense orders, providing strong visibility into future production requirements.
RTX has a Zacks Rank #2 (Buy) with a VGM Score of C. The company released second-quarter 2026 earnings on July 23, before market open and gained around 7.3% on the same day.
Northrop GrummanNorthrop Grumman (NOC - Free Report) reported second-quarter 2026 adjusted earnings of $7.68 per share, which beat the Zacks Consensus Estimate of $6.84 by 12.3%. The bottom line, however, declined 5.8% from the year-ago quarter’s level of $8.15.
NOC’s total sales of $10.88 billion in the second quarter beat the Zacks Consensus Estimate of $10.80 billion by 0.7%. The top line also improved 5.1% from $10.35 billion reported in the year-ago quarter. Total operating income during the quarter was $1.10 billion, reflecting a significant decrease from $1.43 billion in the prior-year quarter.
The company’s total backlog was $95.68 billion at the end of the second quarter compared with $95.61 billion at the end of first-quarter 2026.
The company has a Momentum Score of A. NOC came up with second-quarter 2026 earnings on July 21, before market open and has since gained around 10%.
Defense ETFs to ConsiderFor investors looking to bet on second-quarter results as well as the continued surge in military spending, the following Defense ETFs provide a great opportunity.
Investors can consider iShares U.S. Aerospace & Defense ETF (ITA - Free Report) , Invesco Aerospace & Defense ETF (PPA - Free Report) , SPDR S&P Aerospace & Defense ETF (XAR - Free Report) , Global X Defense Tech ETF (SHLD - Free Report) , First Trust Indxx Aerospace & Defense ETF (MISL - Free Report) and U.S. Global Technology and Aerospace & Defense ETF (WAR - Free Report) .
Now that Elon Musk's rocket company trades publicly, it is fair to ask what a modest stake might become. So how much could $5,000 in Space Exploration Technologies (SPCX -2.55%) be worth by 2030? It depends almost entirely on a valuation that is already sky-high.
And that concern is exactly why I think a much cheaper, profitable space company, Northrop Grumman (NOC +0.38%), may be the smarter buy right now.
Image source: Getty Images.
The SpaceX math, and the catch Start with the numbers. SpaceX (as Musk's company is also known) carries a market value of about $1.5 trillion, which works out to roughly 80 times annual sales, a hefty multiple even for a fast grower.
For $5,000 to become meaningful money by 2030, the stock would essentially need to double, lifting SpaceX toward $3 trillion. That is possible if Starlink, its satellite internet provider, keeps growing and Starship finally hits its stride, in which case your $5,000 could easily grow to roughly $10,000.
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But here is the catch: At 80 times sales, SpaceX revenue has to increase enormously simply to justify today's price, let alone double it. If that premium multiple compresses even modestly, as rich valuations often do, the stock could tread water or fall even while the business grows. And that is precisely what has happened lately, with the shares slipping below their offering price. You are betting on a flawless five years and a market willing to keep paying a steep premium the whole way.
Why Northrop Grumman may be the better buy today Now, consider the alternative: Northrop Grumman is not a hype stock; it is one of the largest space companies. It builds satellites, launch vehicles, rocket motors, and missile-defense systems, and it has missile-tracking and defense satellites on order, plus a central role in the B-21 Stealth Bomber. Its order backlog recently hit a record of almost $105 billion, giving it years of work, and generating billions of dollars in real free cash flow every year.
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The valuation is where it gets compelling. Northrop trades at roughly 16 times earnings, a fraction of SpaceX's multiple, and it pays a growing dividend on top of that. With global defense budgets climbing to records and initiatives like the Golden Dome missile shield ramping up, it is riding many of the same space and security tailwinds as SpaceX.
But you are buying proven profits at a sensible price rather than paying up for a promise. That combination gives your $5,000 a genuine margin of safety, something SpaceX simply cannot offer at recent prices
The trade-offs worth naming I will be fair to SpaceX because it has the higher ceiling. Starlink's consumer reach, direct-to-cell ambitions, and the sheer scale of Starship are things Northrop will never match, and if those bets pay off, SpaceX could deliver returns a defense contractor cannot.
Northrop, for its part, grows more slowly, in the mid-single-digit percentages, and has a history of occasional costly charges on complex programs. This is a choice between a high-ceiling, high-price bet and a lower-ceiling, lower-price one.
Could $5,000 in SpaceX roughly double by 2030? Perhaps, if many things breaks right. But you would be paying one of the richest valuations in the market for that hope, with real risk of disappointment along the way.
Northrop Grumman offers a cheaper, profitable, dividend-paying way to invest in the same space and defense boom, with much more downside protection. It's for investors who care about the price they pay. And over a five-year horizon, they should consider the unglamorous industrial as the better buy today. Sometimes the smartest way to bet on the future is to avoid overpaying for it.
SummaryNorthrop Grumman delivered strong Q2 2026 results, with 5% sales growth, a record $104.7B backlog, and raised 2026 guidance despite headline margin pressure.NOC's margin compression stemmed from isolated program issues (SiAW, GEM 63XL), while core segments operated near historical margin levels and cash flow surged.2026 guidance now implies $44B in sales, $28.60–$29.10 EPS, and $3.1–$3.5B in free cash flow, with B-21, Sentinel, and national security space as key growth drivers.I maintain a Strong Buy rating with a $656 base case price target (25% upside), citing stable growth, a robust backlog, and future shareholder return potential post-CapEx cycle.Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More » Getty Images
Northrop Grumman Corporation (NOC) reported a stronger second quarter than the headline year-on-year comparisons suggest. Sales increased modestly, backlog rose to record levels, and adjusted free cash flow surged, with margins and earnings per share being the only metrics with
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PPA targets established defense contractors with lower costs and volatility, while NASA pursues pure-play commercial space companies with higher growth potential.
Key Takeaways NOC signed an MOU with Airbus to expand NATO ISR capabilities using MQ-4C Triton systems.The pact covers communications, data processing, intelligence analysis, dissemination and command systems.NOC's NATO experience and partnerships support faster deployment and allied interoperability. Northrop Grumman (NOC - Free Report) continues to strengthen its position in the Intelligence, Surveillance and Reconnaissance (ISR) market through its advanced unmanned aircraft systems, communications technologies and mission-critical defense solutions. The company develops integrated ISR capabilities that help military customers improve situational awareness, enhance decision-making and support operations across multiple domains.
A key example is Northrop Grumman's recently signed Memorandum of Understanding (MOU) with Airbus Defence and Space to support the expansion of the NATO Intelligence, Surveillance and Reconnaissance Force with MQ-4C Triton uncrewed aircraft systems. The collaboration will explore a transatlantic solution to deliver advanced ISR capabilities for NATO operations while strengthening defense cooperation across the Alliance.
Per the agreement, Northrop Grumman will work with Airbus and several European defense companies to provide services that include airborne and ground communications, data processing, intelligence analysis and dissemination, as well as command and control capabilities. The partnership also builds on the company's experience supporting NATO's existing RQ-4D Phoenix fleet, helping accelerate the deployment of next-generation ISR capabilities and strengthen interoperability among allied forces.
As defense agencies worldwide continue to invest in advanced ISR capabilities, demand for integrated surveillance, communications and command systems is expected to remain strong. Northrop Grumman's expanding international partnerships, proven MQ-4C Triton platform and expertise in communications, networking and mission systems position it well to benefit from long-term defense modernization programs and growing demand for ISR solutions.
Other Stocks to Keep on the WatchlistOther aerospace and defense companies expanding their ISR capabilities are discussed below:
General Dynamics (GD - Free Report) : Through its General Dynamics Information Technology business, the company provides ISR and C5ISR solutions, including secure communications, systems integration and mission support services for military customers.
L3Harris Technologies (LHX - Free Report) : The company offers advanced ISR solutions, including airborne sensors, intelligence systems and secure communications that help improve surveillance, information sharing and mission effectiveness.
The Zacks Rundown for NOCShares of NOC have lost 0.2% in the past month compared with the industry’s 3.6% decline.
Image Source: Zacks Investment Research
The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.60X compared with its industry’s average of 2.46X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2026 earnings has moved south over the past 60 days.
Key Takeaways Northrop raised 2026 sales and MTM-adjusted EPS guidance while holding margins and free cash flow steady.NOC posted $20B in awards, a 1.84 book-to-bill ratio and a record $105B backlog supporting H2 growth.Sentinel added $7.6B to backlog, while missile deals could represent up to $10B in sales over seven years. Northrop Grumman Corporation (NOC - Free Report) used its second-quarter call to push a forward-looking message: demand is broadening, backlog is deepening, and growth should accelerate in the second half of 2026. Management raised sales and MTM-adjusted EPS guidance while keeping its margin and free cash flow framework intact.
That mattered more than the quarter’s headline beat. The call centered on execution against a record $105 billion backlog, continued defense demand, and confidence that recent program charges in Defense Systems and Space do not alter the company’s longer-term growth setup.
NOC Leans on Record BacklogChair, CEO and president Kathy Warden said the biggest takeaway from the quarter was the strength of bookings. Net awards reached $20 billion, driving a 1.84 book-to-bill ratio for the quarter and a new backlog record, which she tied directly to strong global demand and improving U.S. budget support.
Warden also said Northrop expects a full-year book-to-bill ratio of at least 1.25. That outlook underpins management’s view that sales growth should accelerate through the second half, rather than depend on a one-quarter spike.
The quarter itself provided enough support for that stance. Revenues rose 5% year over year to $10.88 billion, surpassing the Zacks Consensus Estimate of $10.80 billion. Adjusted earnings per share came in at $7.68, which beat the consensus mark of $6.84.
Northrop Raises the 2026 BarChief financial officer John Greene framed the guidance increase as an execution story, not just a tax benefit. Northrop lifted 2026 sales guidance to $43.75-$44.25 billion from $43.5-$44.0 billion and raised MTM-adjusted EPS guidance to $28.60-$29.10 from $27.40-$27.90.
Greene said the company still expects a second-half sales profile similar to last year, including mid- to high-single-digit revenue growth in the third quarter. He also reaffirmed segment operating income guidance and adjusted free cash flow guidance of $3.1 billion to $3.5 billion.
One nuance investors were focused on was the quality of the EPS raise. In response to a Bank of America question, Greene said lower taxes helped the quarter, but the higher full-year EPS view also reflects sales execution, stronger second-half margins and cost discipline.
NOC Balances Charges With Program MomentumTwo problem areas shaped the margin discussion. Defense Systems absorbed a $68 million unfavorable EAC adjustment on Stand-in Attack Weapon, while Space Systems took a $91 million unfavorable adjustment on GEM 63XL. Those issues pulled segment margins lower in the quarter.
Management spent considerable time arguing those charges are contained. Warden said GEM 63XL corrective actions now include a redesigned component that passed a static fire test, with redesigned motors expected to begin shipping by year-end.
On SiAW, Warden told a Bank of America analyst that delays in AARGM-ER testing flowed into design and qualification timing, but Northrop is adding resources and lab capacity to move through those issues. Greene added that excluding the missile prime investments, Defense Systems margins would have been closer to 11% in the quarter.
Northrop Highlights Growth PlatformsSentinel remained the clearest growth driver. Warden said further definitization and authorization on the Air Force program added $7.6 billion to the backlog, while recent contract incentives improved profitability and kept milestones on schedule ahead of an expected integrated missile first flight in 2027.
The company also pointed to rising missile demand beyond Sentinel. Warden said Northrop completed qualification work to become a PAC-3 solid rocket motor supplier and now has 10 multiyear missile acceleration agreements representing up to $10 billion of sales opportunity over seven years.
Space was another strategic emphasis. Management said national security space backlog now exceeds $16 billion, with that business expected to generate more than $7 billion in 2026 sales. Warden also reiterated the company’s goal to double annual international sales to $10 billion by 2031, with opportunities spanning Triton, IBCS and other platforms.
NOC Q&A Adds 2027 ClaritySeveral analyst questions pushed management on 2027, and the tone was notably constructive. Warden stopped short of offering a formal growth target, but told Wells Fargo that a record backlog, double-digit international growth and a better production mix support optimism heading into next year.
On B-21, she told UBS that the Air Force is evaluating whether to accelerate production into a larger program of record, with a conclusion expected by year-end. Greene separately said Aeronautics strength reflects both solid B-21 execution and favorable performance on mature production programs.
NASA’s shift away from its original Gateway plan also surfaced in Q&A. Warden said HALO will reduce revenues this year, but the work is being restructured into NASA’s updated plan and extended over a longer period.
Northrop Leaves a Clearer PlaybookThe broad message from management was that the company is investing through near-term friction because demand signals are strengthening. Warden repeatedly tied recent capacity and capability investments to backlog conversion, faster deliveries and longer-cycle growth across missiles, Aeronautics and space.
Greene reinforced that posture on capital allocation. He said higher capital spending remains necessary to support customer demand now, even as investors wait for a firmer free cash flow view for 2027 and 2028 later this year.
Zacks Signals to Watch on NOCNOC currently carries a Zacks Rank #4 (Sell), with a Value Score of C, Growth Score of C, Momentum Score of A and VGM Score of B, according to the provided Zacks data. Under Zacks’ framework, the strongest setups tend to pair a Zacks Rank #1 or #2 with Style Scores of A or B, while Rank #4 or #5 signals weaker estimate revision trends even when some Style Scores are favorable.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
That leaves a mixed signal after the quarter. The Momentum Score of A and VGM Score of B indicate stronger trading-style characteristics than the rank alone suggests, but the Zacks Rank remains the primary screen and can change as analysts revise estimates after the earnings report.
Net Awards: $20 billion in the second quarter, driving a book-to-bill ratio of 1.84 times.Backlog: Reached a new record high of $105 billion, up 17% year-over-
ToplineNorthrop Grumman CEO Kathy Warden on Tuesday appeared to avoid a question about whether the defense contractor’s robotic spacecraft—scheduled for an evening launch by SpaceX—could be weaponized, suggesting she would “leave it up to the U.S. government.”
“I will leave it up to the U.S. government,” CEO Kathy Warden said during an earnings call.
Copyright 2026 The Associated Press. All rights reserved.
Key FactsNorthrop Grumman’s Mission Robotic Vehicle (MRV) is scheduled to launch on Tuesday barring a weather delay, Warden said during the firm’s earnings call, with a roughly four-hour launch window opening at 5:15 p.m. EDT.
Northrop Grumman has pitched its MRV as the first robotic spacecraft capable of repairing, relocating and upgrading satellites in orbit, and Warden indicated the MRV will become operational in 2027 after orbital positioning and testing.
When asked by Melius Research analyst Scott Mikus whether there was a market for an “offensive version” of the MRV that could disable other satellites, Warden replied: “I will leave it up to the U.S. government to decide how that capability might fulfill mission objectives.”
big number$105 billion. That’s the size of Northrop Grumman’s backlog, a record, the company reported Tuesday. The defense contractor raised its sales outlook for the year to up to $44.25 billion, above consensus Wall Street estimates of just below $44 billion, according to FactSet. Earnings through Northrop Grumman’s latest quarter came at $4.86 per share and revenue hit $44.8 billion, well above projections of $2.96 per share and $35.7 billion, respectively.
tangentTesla CEO Elon Musk said in April the automaker’s humanoid robot Optimus “will not just be Tesla’s biggest product ever, but probably the biggest product ever.” Tesla unveiled its robotics project in 2021, as Musk said the company’s goal is to “make a useful humanoid robot as quickly as possible.”
key backgroundNorthrop Grumman has positioned space as one of its major strategic business targets in recent years, landing a series of contracts with the U.S. military. The defense contractor has also expanded into servicing satellites through its SpaceLogistics subsidiary, which developed the MRV. Northrop Grumman’s space segment accounted for 15% of all of its revenue through the latest quarter in addition to a backlog exceeding $16 billion.
further readingForbesTesla Beats First-Quarter Expectations Amid Pivot To Robotics, AIBy Alicia Park
Northrop Grumman Corporation (NOC) Q2 2026 Earnings Call July 21, 2026 9:30 AM EDT
Company Participants
Adam Barr
Kathy Warden - Chair, CEO & President
John Greene - Corporate VP & CFO
Conference Call Participants
Seth Seifman - JPMorgan Chase & Co, Research Division
Sheila Kahyaoglu - Jefferies LLC, Research Division
Gavin Parsons - UBS Investment Bank, Research Division
Jeremy Jason - Citigroup Inc., Research Division
Scott Deuschle - Deutsche Bank AG, Research Division
David Strauss - Wells Fargo Securities, LLC, Research Division
Matthew Akers - BNP Paribas, Research Division
Justin Lang - Morgan Stanley, Research Division
Scott Mikus - Melius Research LLC
Andre Madrid - BTIG, LLC, Research Division
Peter Arment - Robert W. Baird & Co. Incorporated, Research Division
Gautam Khanna - TD Cowen, Research Division
Myles Walton - Wolfe Research, LLC
Presentation
Operator
Good day, and thank you, ladies and gentlemen, and welcome to Northrop Grumman's Second Quarter 2026 Conference Call. Today's call is being recorded. My name is Josh, and I will be your operator today. [Operator Instructions]
I would now like to turn the call over to your host, Mr. Adam Barr, Head of Investor Relations. Mr. Barr, please proceed.
Adam Barr
Good morning, and welcome to Northrop Grumman's Second Quarter 2026 Conference Call. Before we begin, please note that matters discussed on today's call, including guidance and outlooks for 2026 and beyond, reflect the company's judgment based on information available at the time of this call. They constitute forward-looking statements under the safe harbor provisions of federal securities laws. Forward-looking statements involve risks and uncertainties, including those noted in today's press release and our SEC filings, which may cause actual company results to differ materially.
Today's call will also include non-GAAP financial measures, which are reconciled to our GAAP results in the earnings release. Additionally, we refer to a presentation that has been posted to our Investor Relations
Northrop Grumman (NOC) experienced a notable decline in stock price following its Q2 earnings report. The aerospace and defense contractor posted a significant
For the quarter ended June 2026, Northrop Grumman (NOC - Free Report) reported revenue of $10.88 billion, up 5.1% over the same period last year. EPS came in at $7.68, compared to $7.11 in the year-ago quarter.
The reported revenue represents a surprise of +0.73% over the Zacks Consensus Estimate of $10.8 billion. With the consensus EPS estimate being $6.84, the EPS surprise was +12.28%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Northrop Grumman performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Sales- Mission Systems: $3.25 billion versus the three-analyst average estimate of $3.21 billion. The reported number represents a year-over-year change of +3%.Sales- Aeronautics Systems: $3.52 billion versus the three-analyst average estimate of $3.27 billion. The reported number represents a year-over-year change of +13%.Sales- Intersegment eliminations: $-739 million versus $-556.86 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +32.7% change.Sales- Space Systems: $2.75 billion compared to the $2.76 billion average estimate based on three analysts. The reported number represents a change of +4% year over year.Sales- Defense Systems: $2.09 billion compared to the $2.14 billion average estimate based on three analysts. The reported number represents a change of +5.1% year over year.Operating income (loss)- Intersegment eliminations: $-97 million versus $-79.82 million estimated by three analysts on average.Operating income (loss)- Mission Systems: $501 million compared to the $468.64 million average estimate based on three analysts.Operating income (loss)- Space Systems: $236 million versus $298.67 million estimated by three analysts on average.Operating income (loss)- Aeronautics Systems: $362 million versus the three-analyst average estimate of $306.92 million.Operating income (loss)- Defense Systems: $156 million compared to the $213.11 million average estimate based on three analysts.Segment operating income adjustment- Unallocated corporate expenses: $-69 million versus $-54.5 million estimated by two analysts on average.View all Key Company Metrics for Northrop Grumman here>>>
Shares of Northrop Grumman have returned +3.3% over the past month versus the Zacks S&P 500 composite's -0.6% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
SpaceX Has Real Value—But These 3 Stocks Have Better Odds Right NowNorthrop Grumman NYSE: NOC raised its 2026 sales and earnings outlook after reporting stronger second-quarter bookings, a record backlog and revenue growth across all four of its business segments, while management also addressed cost pressures on two programs that weighed on segment margins.
Chair, CEO and President Kathy Warden said the company is seeing increased demand tied to U.S. defense priorities, international modernization efforts and production-ready systems in areas including missiles, missile defense, autonomous aircraft and national security space.
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RTX Is Set to Revolutionize Munitions Manufacturing“We are fully aligned with the U.S. government priorities and see significant opportunity and increased demand for our portfolio,” Warden said on the company’s second-quarter 2026 earnings call.
Bookings Push Backlog to Record Level Northrop Grumman reported $20 billion in net awards during the quarter, producing a book-to-bill ratio of 1.84 times. Backlog rose to a record $105 billion, up 17% from a year earlier, according to CFO John Greene.
The Pentagon's AI Pivot Supercharges Defense StocksWarden said the company now expects full-year book-to-bill of at least 1.25 times, citing continued strong bookings and improving government outlays. She said core programs remain well supported in the U.S. base budget request, even as Congress and the administration continue working through fiscal 2027 authorization, appropriations, supplemental defense funding and a reconciliation package focused on military modernization and the defense industrial base.
Northrop Grumman said second-quarter sales increased 5% year over year to $10.9 billion and rose 10% sequentially. Adjusted free cash flow was nearly $1 billion in the quarter, while capital expenditures totaled $302 million as the company continues to expand facilities to support customer demand.
Company Raises 2026 Guidance Management increased full-year sales guidance to a range of $43.75 billion to $44.25 billion, with a midpoint of $44 billion, representing more than 5% organic growth. Northrop Grumman also raised its mark-to-market adjusted earnings per share outlook by $1.20 to a range of $28.60 to $29.10.
Greene said the higher EPS outlook reflects a combination of higher sales, expected strong second-half margins, tax benefits and ongoing efforts to manage operating costs. Second-quarter diluted EPS was $7.68. Greene said EPS benefited from a lower effective tax rate, including the remeasurement of uncertain tax positions after recent developments with the IRS, as well as a gain tied to the sale of an equity investment.
The company reaffirmed adjusted free cash flow guidance of $3.1 billion to $3.5 billion for 2026 and said it still expects $1.85 billion of capital expenditures this year. Greene said CapEx investments are expected to run around 4.5% of sales in 2027 and 2028 as Northrop Grumman supports the B-21 production ramp.
Segment Results Mixed by Program Adjustments Aeronautics Systems delivered the strongest segment performance in the quarter, with sales up 13% on higher volumes for B-21, TACAMO and mature production programs. Operating margin increased to 10.3%, which Greene attributed to strong performance across production and sustainment programs. The company raised its full-year Aeronautics sales estimate to about $14 billion and lifted expected margins to the mid-to-high 9% range.
Defense Systems sales increased 5%, or 7% organically, driven by Sentinel and missile defense programs. Operating margin was 7.5%, reflecting a $68 million unfavorable estimate-at-completion adjustment on the Stand-in Attack Weapon, or SiAW, program. Excluding SiAW, Greene said the rest of the Defense Systems portfolio contributed an operating margin rate of 11% in the quarter.
Warden said higher projected SiAW costs were tied to qualification testing and schedule effects from delays in testing on the AARGM-Extended Range program, which she said is related to the company’s broader tactical missile growth strategy. She said Northrop Grumman has added resources and integration lab capacity to help work through the challenges.
Mission Systems sales rose 3%, supported by marine programs, F-35 sensors and restricted airborne radar programs. The segment’s margin rate improved to 15.4%, driven by strong execution and higher net favorable EAC adjustments. Northrop Grumman raised its full-year Mission Systems margin outlook to approximately 15% while maintaining its sales guidance in the high $12 billion range.
Space Systems sales increased 4%, driven by NASA Commercial Resupply Services and missile defense programs. Operating margin was 8.6%, affected by an unfavorable EAC adjustment on the GEM 63XL program tied to increased estimated material costs and quantities. Warden said the company has progressed on the root cause investigation following a first-quarter launch anomaly and has completed a successful static fire test of a redesigned component. Deliveries of redesigned motors are expected to begin by year-end.
Northrop Grumman lowered its full-year Space margin expectation to the low 10% range but maintained its sales outlook of about $11 billion.
Sentinel, B-21 and Missile Programs Remain Key Growth Drivers Warden highlighted progress on the Sentinel program, including further definitization and authorization that added $7.6 billion to program backlog. She said the company achieved contract incentives during the quarter, completed an acoustic test of the Sentinel missile and has solid rocket motors for the first five flight tests in production. First flight of the integrated missile is expected in 2027.
On the B-21, Warden said Northrop Grumman is working with the Air Force as it analyzes whether to accelerate production into a larger program of record. She said she expects the Air Force to reach a conclusion by year-end.
The company also pointed to opportunities in solid rocket motors. Warden said Northrop Grumman completed qualification activities to become a supplier on PAC-3 and reached a $2 billion framework agreement with the Department of Defense and Lockheed Martin. A PAC-3 solid rocket motor production award is expected later this year.
Warden said Northrop Grumman has 10 multi-year agreements for missile acceleration across its portfolio, representing up to $10 billion of sales opportunity over the next seven years.
International Demand and Space Opportunities Expand Northrop Grumman reiterated its goal of doubling annual international sales to $10 billion by 2031. Warden cited NATO’s commitment involving Triton autonomous aircraft, Kuwait’s State Department authorization for six IBCS systems and Australia’s selection of Northrop Grumman to establish an in-country solid rocket motor manufacturing facility.
In the Middle East, Warden said missile defense remains a priority and noted letters of request from the United Arab Emirates and Qatar for IBCS, along with discussions with other countries in the region. She also said the foreign military sales process has improved, with cases being approved at a faster rate than in prior years.
Management also emphasized national security space as a growing priority. Warden said Northrop Grumman’s national security space backlog exceeds $16 billion and that the business is projected to grow high single digits this year, generating more than $7 billion in sales and accounting for over 15% of company revenue.
The company also discussed its Mission Robotic Vehicle, a commercial robotic spacecraft designed to service satellites in geosynchronous orbit and install life-extension systems. Warden said the first MRV was scheduled to launch later that day, weather permitting, and is expected to become operational in 2027 after reaching orbit and completing testing.
Warden closed the call by saying Northrop Grumman remains confident in improved second-half margin performance and is focused on resolving the SiAW and GEM 63XL program issues while maintaining strong execution across the broader portfolio.
About Northrop Grumman (NYSE:NOC)Northrop Grumman Corporation NYSE: NOC is a leading U.S.-based aerospace and defense company that designs, builds and sustains advanced systems, products and technologies for government and commercial customers. Formed through the combination of Northrop and Grumman businesses in the 1990s, the company's portfolio spans manned and unmanned aircraft, space systems, missile defense, radar and sensor systems, and integrated command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) solutions.
The company's work includes airframe and platform manufacturing, space hardware and satellite systems, advanced mission systems and cybersecurity services, as well as logistics, sustainment and modernization programs.
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Key Takeaways Northrop Grumman's Q2 adjusted EPS beat estimates by 12.3%, while sales rose 5.1% year over year.Aeronautics led segment growth with a 13% sales increase, driven by B-21 and restricted programs.Northrop Grumman raised 2026 revenue and adjusted EPS guidance, with free cash flow at $3.10-$3.50B. Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2026 adjusted earnings of $7.68 per share, which beat the Zacks Consensus Estimate of $6.84 by 12.3%. The bottom line, however, declined 5.8% from the year-ago quarter’s level of $8.15.
NOC’s Total SalesNOC’s total sales of $10.88 billion in the second quarter beat the Zacks Consensus Estimate of $10.80 billion by 0.7%. The top line also improved 5.1% from $10.35 billion reported in the year-ago quarter.
Northrop Grumman’s Backlog CountThe company’s total backlog was $95.68 billion at the end of the second quarter compared with $95.61 billion at the end of first-quarter 2026.
NOC’s Segmental DetailsAeronautics Systems: This segment’s sales of $3.52 billion rose 13% year over year, driven by higher sales from B-21 and other restricted programs, as well as increased volume on the E-130J TACAMO program.
The unit’s operating income totaled $362 million compared with $321 million in the second quarter of 2025. Its operating profit margin remained the same at 10.3%.
Mission Systems: Sales in this segment increased 2.9% to $3.25 billion. This was driven by ramp-up on restricted airborne radar programs and higher volume on marine systems programs.
The unit’s operating income increased 13.6% to $501 million. The operating margin expanded 140 basis points (bps) to 15.4%.
Defense Systems: This segment’s sales rose 5.1% year over year to $2.09 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.
The unit’s operating income declined 38.3% year over year to $156 million. The operating margin contracted 520 bps to 9.7%.
Space Systems: Sales in this segment rose 4% to $2.75 billion. This improvement was driven by higher Commercial Resupply Service (CRS) missions as well as higher volume on the Glide Phase Interceptor (GPI) and Ground-based Midcourse Defense Weapon System (GMD WS) programs.
The segment’s operating income decreased 17% year over year to $235 million. The operating margin also contracted 150 bps to 9.5%.
Northrop Grumman’s Operational UpdateTotal operating income during the quarter totaled $1.10 billion, reflecting a significant decrease from $1.43 billion in the prior-year quarter.
NOC’s Financial ConditionNorthrop Grumman’s cash and cash equivalents as of June 30, 2026, totaled $2.31 billion, down from $4.40 billion as of Dec. 31, 2025.
Long-term debt (net of the current portion) amounted to $14.43 billion compared with $15.16 billion as of Dec. 31, 2025.
Net cash outflow from operating activities totaled $376 million during the first six months of 2026 compared with $697 million a year ago.
Northrop Grumman’s 2026 GuidanceThe company expects its revenues to be in the range of $43.75-$44.25 billion compared with its previous guidance of $43.50-$44.00 billion. The Zacks Consensus Estimate for sales is pegged at $43.96 billion, lower than the midpoint of the company’s guided range.
NOC expects adjusted earnings to be in the band of $28.60-$29.10 per share compared with its previous guidance of $27.40-$27.90 per share. The consensus estimate for earnings is pegged at $28.19 per share, above the company’s guided range.
Northrop Grumman projects to generate adjusted free cash flow in the band of $3.10-$3.50 billion.
NOC’s Zacks RankUpcoming Q1 Defense ReleasesThe Boeing Company (BA - Free Report) is set to report second-quarter 2026 earnings on July 28, 2026, before market open.
The Zacks Consensus Estimate for BA’s loss is pegged at 24 cents per share. The consensus estimate for its sales is pegged at $24.03 billion, indicating year-over-year growth of 5.7%.
Lockheed Martin (LMT - Free Report) is set to report second-quarter 2026 earnings on July 23, 2026, before market open.
The consensus estimate for LMT’s earnings is pegged at $7.22 per share. The consensus estimate for its sales is pegged at $19.52 billion, indicating year-over-year growth of 7.5%.
General Dynamics Corporation (GD - Free Report) is set to report second-quarter 2026 results on July 29, 2026, before market open.
The Zacks Consensus Estimate for GD’s earnings is pegged at $3.93 per share. The consensus estimate for its sales is pegged at $13.49 billion, indicating year-over-year growth of 3.4%.
Key Takeaways Pre-Markets Are Higher Despite Precarious News on Middle EastQ2 Earnings Results Were Strong for GM, MMM, DHI & MoreOil and Bond Yields Creeping Up Ahead of the Bell Tuesday, July 21st, 2026
Pre-market futures have pushed into the green at this hour, although they are off early morning highs. Investor sentiment remains complicated into the second trading day of the week, with headwinds continuing from AI capex concerns and renewed hostilities in and around the Strait of Hormuz.
The Dow is +129 points presently, +0.25%, while the S&P 500 is +32 points, +0.43%. The Nasdaq is the only major index looking like its pushing continually higher in today’s pre-market, +400 points, +1.39%, while the small-cap Russell 2000 is +11, +0.38%. WTI spot oil has creeped up to $84 per barrel (/bbl) this morning, $90 on Brent crude. Bond yields are inching up as well: +4.61% on the 10-year, +4.22% on the 2-year.
Wide Swath of Quarterly Earnings Results Hit the TapeAhead of today’s open, General Motors (GM - Free Report) posted an impressive +14% earnings surprise for its Q2 to $3.57 per share, with revenues $48.03 billion easily surpassing the Zacks consensus by +3.15%, and higher than the $47.12 billion reported a year ago. GM even raised its full-year guidance, though shares are only modestly moving higher at this hour. The stock is up +43% from a year ago. For more on GM’s earnings, click here.
Minnesota-based international conglomerate 3M (MMM - Free Report) also outperformed expectations this morning, with earnings of $2.40 per share surpassing the $2.27 anticipated, for a +5.73% beat. In fact, it’s the biggest earnings beat from the company since the June quarter a year ago. Full-year guidance was also raised. Shares are up +7% on the news so far this morning.
Inflammation and oncology treatment maker Novartis (NVS - Free Report) — developer of Entresto, Cosentyx, Kisqali and Pluvicto, to name but a few — put up a +9.55% earnings beat: $2.41 per share versus $2.20 anticipated. This is Novartis’ first earnings beat since the December 2025 quarter. Shares are up +2.4% in today’s pre-market, +31% over the past year.
Defense giant Northrop Grumman (NOC - Free Report) posted an earnings beat of +12.28%: $7.68 per share versus $6.84 projected. This marks the company’s fifth-straight earnings beat. Revenues of $10.88 billion came in +0.73% ahead of the Zacks consensus, though a record backlog of $105 billion wasn’t enough to impress early traders — shares are down -4.2% ahead of the open. For more on NOC’s earnings, click here.
Major toy manufacturer Hasbro (HAS - Free Report) outperformed Q2 estimates by +9.4%: $1.28 per share versus $1.17 expected, with revenues of $1.14 billion outpacing estimates by +8.93%, nicely up from $980.8 million reported in the year-ago quarter. Shares are up +2.4% on the news — nearly half on the stock’s entire gains over the past year. For more on HAS’ earnings, click here.
“America’s largest homebuilder” D.R. Horton (DHI - Free Report) also outperformed expectations on its fiscal Q3 quarterly results this morning. Earnings of $3.20 per share swept past the $2.99 forecast, for a +7% beat. This is the third earnings beat for the Texas-based homebuilder in its past four quarters. Revenues matched the year-ago tally at $9.23 billion for the quarter, +0.46% higher than anticipated. For more on DHI’s earnings, click here.
Questions or comments about this article and/or author? Click here>>
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Signage is displayed at the Northrop Grumman Corporation booth at Special Operations Forces (SOF) Week for defense companies in Tampa, Florida, U.S., May 7, 2024. REUTERS/Luke Sharrett Purchase Licensing Rights, opens new tab
July 21 (Reuters) - Defense supplier Northrop Grumman (NOC.N), opens new tab on Tuesday lifted its 2026 sales and adjusted profit forecast, supported by sustained demand for weapons amid a wave of geopolitical conflicts.
Shares were down 4% in early trading in New York as the company said two of its four business segments did not perform well during the quarter.
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U.S. President Donald Trump has been pressing defense companies to expand manufacturing capacity and boost weapons production as the wars in Ukraine and the Middle East drain the country's stockpiles.
The U.S. has expended more than 50,000 rockets, missiles and other rocket-propelled projectiles since the beginning of the Russia-Ukraine conflict in 2022 through the war with Iran, according to data from the Pentagon.
Trump has also proposed a record $1.5 trillion military budget for fiscal year 2027, far exceeding the $901 billion approved for 2026.
Revenue in Northrop's defense systems business rose 5%, helped by strong sales in its Sentinel program, the land-based leg of the U.S. nuclear triad.
However, operating income in the defense business fell 38% as the company spends more to develop and qualify its air-to-surface missile, Stand-in Attack Weapon and mature production for the long-range version of the Advanced Anti-Radiation Guided Missile.
"Given the market’s tendency to punish execution challenges, we could see pressure on the stock, though we do not believe expectations for the quarter were very high," said Seth Seifman, analyst at JP Morgan.
Northrop's largest revenue segment, Aeronautics, posted a 13% increase in second-quarter sales compared with a year earlier, driven by strong performance in the B-21 Raider program and other classified programs.
The B-21 Raider, a nuclear-capable long-range strike aircraft, received a major production boost in February, when Northrop signed an Air Force agreement, opens new tab expanding production capacity by 25%, with the first delivery set for 2027.
Northrop lifted its 2026 revenue forecast by $250 million to a range of $43.75 billion to $44.25 billion, roughly in line with Wall Street estimates, according to data compiled by LSEG.
Excluding items, the company now expects 2026 profit between $28.60 and $29.10 per share, compared to a prior range of $27.40 to $27.90 apiece.
The Falls Church, Virginia-based company reported total sales of $10.88 billion for the quarter ended June 30, compared to analysts' expectations of $10.81 billion. Its total backlog rose 9% to $104.7 billion during the period - a record.
Its per-share quarterly profit stood at $7.68, compared with $8.15 a year earlier, with the latter including a $1.04 benefit from the divestiture of Northrop's training services business. Analysts on average expected $6.82 per share.
The beat in quarterly profit was primarily due to a lower tax rate, according to analysts at JP Morgan and TD Cowen.
Reporting by Aishwarya Jain in Bengaluru; Editing by Jonathan Ananda and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Mike Stone is a Reuters reporter covering the U.S. arms trade and defense industry. Most recently Mike has been focused on the Golden Dome missile defense shield. Mike also spends a lot of his time writing on Ukraine and how industry has adapted, or faltered as it supports that conflict. Mike, a New Yorker, has extensively covered how the U.S. has supplied Ukraine with weapons, the cadence, decisions and milestones that have had battlefield impacts. Before his time in Washington Mike’s coverage focused on mergers and acquisitions for oil and gas companies, financial institutions, defense companies, consumer product makers, retailers, real estate giants, and telecommunications companies.
Northrop Grumman Corporation (NYSE:NOC) shares are trading lower Tuesday after the company reported second-quarter financial results.
Northrop Grumman shares are retreating from recent levels. Why is NOC stock falling? Beats Q2 Estimates, Backlog Hits Record $104.7BNorthrop reported GAAP earnings per share of $7.68, beating the consensus estimate of $6.82. In addition, it reported revenue of $10.87 billion, beating the consensus estimate of $10.80 billion.
Net awards of $20 billion pushed the company’s backlog to a new record of $104.7 billion. Significant new awards included $7.6 billion for Sentinel, $4.3 billion for restricted programs, $1.0 billion for F-35, $0.8 billion for Glide Phase Interceptor, and $0.7 billion for Multi-role Electronically Scanned Array.
“Northrop Grumman achieved a new record backlog, driven by robust global demand for our products,” said Kathy Warden, Chair, CEO and President.
Lifts FY EPS, Revenue GuidanceNorthrop raised its fiscal-year adjusted earnings per share guidance from between $27.40 and $27.90 to between $28.60 and $29.10, versus the consensus estimate of $27.97. It also raised its fiscal-year revenue guidance from between $43.50 billion and $44.00 billion to between $43.75 billion and $44.25 billion, versus the consensus estimate of $43.98 billion.
Northrop Shares Edge LowerNOC Price Action: At the time of publication, Northrop shares are trading 4.34% lower at $501.21, according to data from Benzinga Pro.
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Northrop Grumman (NOC - Free Report) came out with quarterly earnings of $7.68 per share, beating the Zacks Consensus Estimate of $6.84 per share. This compares to earnings of $7.11 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +12.28%. A quarter ago, it was expected that this defense contractor would post earnings of $6.08 per share when it actually produced earnings of $6.14, delivering a surprise of +0.99%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Northrop Grumman, which belongs to the Zacks Aerospace - Defense industry, posted revenues of $10.88 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.73%. This compares to year-ago revenues of $10.35 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Northrop Grumman shares have lost about 8.1% since the beginning of the year versus the S&P 500's gain of 8.7%.
What's Next for Northrop Grumman?While Northrop Grumman has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Northrop Grumman was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $7.02 on $10.97 billion in revenues for the coming quarter and $27.96 on $43.96 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Textron (TXT - Free Report) , has yet to report results for the quarter ended June 2026. The results are expected to be released on July 28.
This maker of Cessna small planes and Bell helicopters is expected to post quarterly earnings of $1.52 per share in its upcoming report, which represents a year-over-year change of -1.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Textron's revenues are expected to be $3.82 billion, up 2.8% from the year-ago quarter.
July 21, 2026 06:54 ET | Source: Northrop Grumman Corporation
FALLS CHURCH, Va., July 21, 2026 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE: NOC) has released its second quarter 2026 financial results. A copy of the earnings release has been furnished in the company’s Form 8-K filing and is also available on the company's investor relations website at http://investor.northropgrumman.com.
Earnings Call Webcast
As previously announced, Northrop Grumman will webcast its earnings conference call at 9:30 a.m. Eastern time today. A live audio broadcast of the conference call will be available on http://investor.northropgrumman.com.
About Northrop Grumman
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day.
Northrop Grumman Corporation (NYSE:NOC) will release its second quarter earnings report before the opening bell on Tuesday, July 21.
Analysts expect the Falls Church, Virginia-based company to report quarterly earnings of $6.82 per share, down from $8.15 per share in the year-ago period. The consensus estimate for Northrop Grumman’s quarterly revenue is $10.8 billion. It reported $10.35 billion last year, according to Benzinga Pro.
On April 21, Northrop Grumman posted upbeat first-quarter earnings.
Shares of Northrop Grumman gained 0.5% to close at $523.96 on Monday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.
Considering buying NOC stock? Here’s what analysts think:
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D.A. Davidson & CO. cut its position in Northrop Grumman Corporation (NYSE:NOC – Free Report) by 31.5% in the first quarter, according to its most recent Form 13F filing with the SEC. The institutional investor owned 6,466 shares of the aerospace company’s stock after selling 2,971 shares during the quarter. D.A. Davidson & CO.’s holdings in Northrop Grumman were worth $4,411,000 at the end of the most recent reporting period.
Several other hedge funds have also modified their holdings of NOC. Torren Management LLC purchased a new position in shares of Northrop Grumman in the 4th quarter worth approximately $26,000. Karpus Management Inc. purchased a new stake in Northrop Grumman during the fourth quarter valued at approximately $26,000. Kohmann Bosshard Financial Services LLC purchased a new stake in Northrop Grumman during the fourth quarter valued at approximately $29,000. Financial Life Planners purchased a new stake in Northrop Grumman during the first quarter valued at approximately $30,000. Finally, Motiv8 Investments LLC acquired a new stake in Northrop Grumman in the fourth quarter valued at approximately $30,000. 83.40% of the stock is owned by hedge funds and other institutional investors.
Key Headlines Impacting Northrop Grumman Here are the key news stories impacting Northrop Grumman this week:
Positive Sentiment: Defense stocks are benefiting from a broader sector rally as investors respond to expectations for stronger U.S. military spending, including a proposed $1.5 trillion defense budget backdrop. Northrop Grumman rises as defense-spending tailwinds and program momentum lift sentiment Positive Sentiment: Investor attention is building ahead of Northrop Grumman’s July 21 Q2 results, with a strong backlog and government contract momentum expected to support the quarter. Northrop Grumman to Post Q2 Earnings: Here’s What to Expect Positive Sentiment: Recent program news, including work tied to Sentinel infrastructure, is reinforcing the long-term growth story for strategic deterrence and aerospace missions. Northrop Grumman Planning To Add Hundreds Of Jobs For Sentinel Neutral Sentiment: Analyst commentary remains mixed-to-positive, with recent coverage focused on key earnings metrics and margin sensitivity, especially around the Sentinel program. Negative Sentiment: Insider trading data shows no open-market insider buying in the last six months, while several executives have sold shares, which may temper some enthusiasm. Northrop Grumman Stock Up 0.9% NYSE:NOC opened at $523.19 on Friday. The company has a market cap of $74.31 billion, a PE ratio of 16.38, a P/E/G ratio of 3.53 and a beta of -0.10. Northrop Grumman Corporation has a twelve month low of $493.84 and a twelve month high of $774.00. The company has a current ratio of 1.15, a quick ratio of 1.04 and a debt-to-equity ratio of 0.84. The company’s 50 day moving average is $538.07 and its two-hundred day moving average is $623.81.
Northrop Grumman (NYSE:NOC – Get Free Report) last posted its quarterly earnings results on Tuesday, April 21st. The aerospace company reported $6.14 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $6.06 by $0.08. Northrop Grumman had a net margin of 10.80% and a return on equity of 24.72%. The business had revenue of $9.88 billion during the quarter, compared to analysts’ expectations of $9.75 billion. During the same quarter last year, the company posted $6.06 earnings per share. The business’s quarterly revenue was up 4.4% on a year-over-year basis. Northrop Grumman has set its FY 2026 guidance at 27.400-27.900 EPS. Analysts anticipate that Northrop Grumman Corporation will post 27.95 EPS for the current year.
Northrop Grumman Increases Dividend The company also recently announced a quarterly dividend, which was paid on Wednesday, June 17th. Investors of record on Monday, June 1st were given a $2.47 dividend. This represents a $9.88 annualized dividend and a dividend yield of 1.9%. The ex-dividend date of this dividend was Monday, June 1st. This is a positive change from Northrop Grumman’s previous quarterly dividend of $2.31. Northrop Grumman’s payout ratio is currently 30.92%.
Wall Street Analyst Weigh In Several research firms have issued reports on NOC. Weiss Ratings lowered shares of Northrop Grumman from a “hold (c+)” rating to a “hold (c)” rating in a report on Wednesday. Wells Fargo & Company reiterated an “overweight” rating and set a $620.00 price objective on shares of Northrop Grumman in a report on Wednesday, July 8th. Morgan Stanley set a $745.00 price objective on Northrop Grumman in a research report on Wednesday. TD Cowen dropped their target price on Northrop Grumman from $680.00 to $580.00 and set a “hold” rating on the stock in a research note on Monday, July 13th. Finally, Citigroup dropped their target price on Northrop Grumman from $628.00 to $587.00 and set a “buy” rating on the stock in a research note on Wednesday, July 1st. One equities research analyst has rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and ten have given a Hold rating to the company. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus target price of $676.29.
Read Our Latest Analysis on Northrop Grumman
Northrop Grumman Company Profile (Free Report)
Northrop Grumman Corporation (NYSE: NOC) is a leading U.S.-based aerospace and defense company that designs, builds and sustains advanced systems, products and technologies for government and commercial customers. Formed through the combination of Northrop and Grumman businesses in the 1990s, the company’s portfolio spans manned and unmanned aircraft, space systems, missile defense, radar and sensor systems, and integrated command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) solutions.
The company’s work includes airframe and platform manufacturing, space hardware and satellite systems, advanced mission systems and cybersecurity services, as well as logistics, sustainment and modernization programs.
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Northrop Grumman trades around 16 to 17 times earnings against a 5-year average near 19. CCL stock trades near 17 to 18 times forward earnings against a 5-year average close to 19, so you are paying near fair value, not grabbing a deep discount. Northrop is a beaten-down leader. The price fell hard, the multiple compressed below its history, and the payoff depends on management delivering on the B-21. More reward if they do, more risk if they stumble.
Key Takeaways Northrop Grumman is expected to post higher Q2 revenues supported by strong backlog and defense demand.NOC expects high single-digit sequential sales growth across all four operating segments.NOC faces execution risk as Sentinel program cost and contract discussions continue. Northrop Grumman Corporation (NOC - Free Report) is scheduled to release second-quarter 2026 results on July 21, before market open. The company delivered an earnings surprise of 0.99% in the last reported quarter.
Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Key Factors Likely to Influence NOC’s Q2 ResultsNorthrop Grumman’s second-quarter earnings are expected to have benefited from solid demand, supported by one of the strongest backlogs in the defense industry. It offers strong visibility into near-term revenue streams.
Continued geopolitical tensions, increasing U.S. and allied defense spending, and demand for advanced aircraft, missile defense, space systems, and autonomous technologies should have continued to support new contract awards and program execution during the second quarter.
Management stated that it expects "high single-digit sequential sales growth" in the second quarter. This suggests that revenues should increase meaningfully from the first-quarter level, with growth expected across all four operating segments rather than being driven by a single business. Segment operating margins are expected to improve, driven by stronger operational performance, favorable production timing and a better business mix.
The company’s top line is likely to have benefited from the ramp-up of major programs, particularly in missile systems, airborne radar, and strategic modernization efforts. These programs are transitioning into higher production phases, which typically boosts revenues.
While the Sentinel program remains a key long-term growth driver for Northrop Grumman, it also represents the company's biggest execution risk. Following cost overruns and schedule delays, the U.S. Air Force restructured the program, and discussions with the government on revised costs, timelines, and contract terms are ongoing. If the company records additional cost growth, revises program estimates, or recognizes new charges during the second quarter, it could negatively impact operating margins and earnings.
NOC’s Q2 ExpectationsThe Zacks Consensus Estimate for earnings is pegged at $6.84 per share, indicating a year-over-year decrease of 3.8%.
The Zacks Consensus Estimate for revenues is pinned at $10.78 billion, implying a year-over-year improvement of 4.1%.
What the Zacks Model UnveilsOur proven model predicts an earnings beat for Northrop Grumman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as you will see below.
Other Stocks to ConsiderInvestors may also consider the following players from the same industry, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.
RTX Corporation (RTX - Free Report) is likely to come up with an earnings beat when it announces second-quarter results on July 23, before market open. It has an Earnings ESP of +2.02% and a Zacks Rank #2 at present.
The consensus estimate for RTX’s second-quarter sales suggests an improvement of 5.8% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 12.7% for the trailing four quarters.
General Dynamics (GD - Free Report) is likely to come up with an earnings beat when it announces second-quarter results on July 29, before market open. It has an Earnings ESP of +2.94% and a Zacks Rank #2 at present.
The consensus estimate for GD’s second-quarter sales suggests an improvement of 3.2% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 5.3% for the trailing four quarters.
L3Harris Technologies (LHX - Free Report) is expected to come up with an earnings beat when it reports second-quarter results on July 29, after market close. It has an Earnings ESP of +3.02% and a Zacks Rank #3 at present.
The consensus estimate for LHX’s second-quarter sales implies an improvement of 6.6% from the year-ago quarter’s level. The Zacks Consensus Estimate for earnings is pinned at $2.81 per share, indicating year-over-year growth of 1.1%.
Wall Street analysts forecast that Northrop Grumman (NOC - Free Report) will report quarterly earnings of $6.84 per share in its upcoming release, pointing to a year-over-year decline of 3.8%. It is anticipated that revenues will amount to $10.78 billion, exhibiting an increase of 4.1% compared to the year-ago quarter.
The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.
Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically use consensus earnings and revenue estimates as indicators of quarterly business performance, exploring analysts' projections for specific key metrics can offer valuable insights.
In light of this perspective, let's dive into the average estimates of certain Northrop Grumman metrics that are commonly tracked and forecasted by Wall Street analysts.
Analysts predict that the 'Sales- Mission Systems' will reach $3.21 billion. The estimate indicates a year-over-year change of +1.5%.
Analysts forecast 'Sales- Aeronautics Systems' to reach $3.27 billion. The estimate suggests a change of +4.9% year over year.
Analysts' assessment points toward 'Sales- Space Systems' reaching $2.73 billion. The estimate indicates a change of +3.2% from the prior-year quarter.
The average prediction of analysts places 'Sales- Defense Systems' at $2.14 billion. The estimate indicates a year-over-year change of +7.3%.
According to the collective judgment of analysts, 'Operating income (loss)- Mission Systems' should come in at $468.64 million. The estimate is in contrast to the year-ago figure of $441.00 million.
It is projected by analysts that the 'Operating income (loss)- Space Systems' will reach $299.67 million. Compared to the current estimate, the company reported $280.00 million in the same quarter of the previous year.
The consensus among analysts is that 'Operating income (loss)- Aeronautics Systems' will reach $307.92 million. Compared to the present estimate, the company reported $321.00 million in the same quarter last year.
Analysts expect 'Operating income (loss)- Defense Systems' to come in at $214.78 million. The estimate is in contrast to the year-ago figure of $253.00 million.
The consensus estimate for 'Segment operating income adjustment- Unallocated corporate expenses' stands at -$55.00 million. The estimate is in contrast to the year-ago figure of $143.00 million.
View all Key Company Metrics for Northrop Grumman here>>>
Over the past month, shares of Northrop Grumman have returned -4.5% versus the Zacks S&P 500 composite's +0.5% change. Currently, NOC carries a Zacks Rank #3 (Hold), suggesting that its performance may align with the overall market in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
As the largest defense contractor in Utah, the company marks a pivotal moment for growth, aerospace innovation and national defense investment July 14, 2026 17:58 ET | Source: Northrop Grumman Corporation
ROY, Utah, July 14, 2026 (GLOBE NEWSWIRE) -- Northrop Grumman (NYSE: NOC) broke ground on a new building at its expansive Roy Innovation Center (RIC), the central campus tailor-made to develop the U.S. Air Force Sentinel Intercontinental Ballistic Missile (ICBM) program and other critical aerospace and defense missions. Northrop Grumman’s investment to expand the footprint of the Sentinel program will create hundreds of new jobs and supports the accelerated timeline to deliver Sentinel initial capability to the U.S. Air Force by the early 2030s while enabling long-term growth across multiple national security programs.
The new addition brings the RIC campus to a total of six state-of-the-art buildings and more than 1.1 million square feet of office space, providing capacity for more than 5,000 employees supporting strategic deterrence and advanced aerospace programs. Construction of the new Legacy Building begins this summer and will be completed by 2028.
As the largest defense contractor in Utah, Northrop Grumman’s continued investments in the state are having a significant economic impact while creating hundreds of new jobs across multiple missions and programs. Northrop Grumman directly employs over 11,000 Utahns and, according to a recent study, supports more than 46,000 jobs across the state, generating over $12.4 billion for the economy.
Tony Nolls, Director of Operations, Northrop Grumman; Taylor Woodbury, CEO, Woodbury Construction; Sarah Willoughby, Vice President and General Manager, Sentinel Program Director, Northrop Grumman; Spencer J. Cox, Utah Governor; Ben Davies, Corp. Vice President & President, Defense Systems, Northrop Grumman; Amanda Davis, Vice President and Sentinel EMD Program Manager, Northrop Grumman; Joshua Johnson, Vice President of Business Management, Northrop Grumman. (Photo Credit: Northrop Grumman)
"As Utah's largest aerospace and defense employer, Northrop Grumman is a cornerstone of our state's economy and a key contributor to our nation's security. We are proud to partner with Northrop Grumman as it advances aerospace innovation, strengthens advanced manufacturing, and creates high-quality jobs across Utah. Together, we are ensuring Utah remains a leader in the technologies and capabilities that support our national defense. For generations, Utah has embraced the responsibility of advancing the strategic deterrence mission, and we are proud to uphold and continue that legacy," said Utah Governor Spencer Cox.
“Utah’s world-class talent pool, strategic location to Hill Air Force Base and supportive community make it the ideal home for this expansion of Sentinel and other critical missions we support from this site,” said Ben Davies, corporate vice president and president, Northrop Grumman Defense Systems. “This groundbreaking symbolizes our longstanding commitment to the state and reinforces our investment in national security and local prosperity through an enduring presence that will support multiple missions for decades to come.”
Over the past five years, Northrop Grumman has invested $13.5 billion in infrastructure and R&D, including $2 billion dedicated to solid rocket motor capacity and capabilities—that accelerate and scale production for the Sentinel program and strengthen the broader strategic deterrence and space launch industrial base. As Sentinel continues to advance, Northrop Grumman remains focused on delivering warfighter capabilities that balance breakthrough technology, affordability and speed across a portfolio of missions that rely on our Utah facilities and teams.
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day.
The market expects Northrop Grumman (NOC - Free Report) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 21, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis defense contractor is expected to post quarterly earnings of $6.84 per share in its upcoming report, which represents a year-over-year change of -3.8%.
Revenues are expected to be $10.78 billion, up 4.1% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Northrop Grumman?For Northrop Grumman, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.22%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Northrop Grumman will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Northrop Grumman would post earnings of $6.08 per share when it actually produced earnings of $6.14, delivering a surprise of +0.99%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Northrop Grumman appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected ResultsGE Aerospace (GE - Free Report) , another stock in the Zacks Aerospace - Defense industry, is expected to report earnings per share of $1.86 for the quarter ended June 2026. This estimate points to a year-over-year change of +12.1%. Revenues for the quarter are expected to be $11.86 billion, up 16.8% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for GE has been revised 0.1% down to the current level. Nevertheless, the company now has an Earnings ESP of +2.79%, reflecting a higher Most Accurate Estimate.
This Earnings ESP, combined with its Zacks Rank #2 (Buy), suggests that GE will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
When The War Trade Didn’t Work The reflex is familiar. Shooting starts, defense stocks rip. That script broke this year. The Iran conflict began Saturday, February 28, 2026, so the first trading day for a fresh position was Monday, March 2, 2026. An investor who bought Lockheed Martin (NYSE: LMT | LMT Price Prediction) that morning has watched the position bleed lower, even as the conflict dragged on and munitions demand stayed loud.
The business itself did not go quiet. Lockheed posted a record $194B backlog exiting 2025, ramped F-35 deliveries, and signed a seven-year PAC-3 framework. CEO Jim Taiclet talked up F-35, F-22, and Black Hawk performance during Operation Absolute Resolve. Then a soft Q1 2026 report on April 23 (EPS of $6.44, missing the $6.70 expectation, operating cash flow crashing to $220M from $1.41B) reset the mood, and the stock never regained footing.
Your $10,000 Is Underwater Here is how the trade actually performed, using adjusted closes.
Iran Conflict Window (March 2, 2026 to July 10, 2026)
Initial Investment: $10,000 LMT Start Price: $672.21 LMT End Price: $523.22 Total Return: -22.16% (a loss) Peer check: Northrop Grumman (NYSE:NOC) -29.42%, L3Harris (NYSE:LHX) -22.60%, iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA) -4.47%, General Dynamics (NYSE:GD) +3.75% For the longer-horizon context on LMT alone:
1-Year Return: +15.75% 5-Year Return: +56.27% 10-Year Return: +167.81% A $10,000 stake placed on March 2 is now worth well under $8,000, and there was no late rescue. LMT fell another 4.16% in the week ending July 10. Two $3.45 dividend payments softened the sting slightly, but not meaningfully. I will not pretend to know exactly why the stock fell while missiles were flying. What is clear is that Northrop and L3Harris did worse, so this looks more like a sector reset than a Lockheed-specific unraveling.
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Would I Put New Money In Today? I would buy Lockheed here if I believe the FY26 guide holds ($77.5B to $80.0B revenue, EPS $29.35 to $30.25, FCF $6.5B to $6.8B), the Golden Dome and PAC-3 ramps convert backlog into cash, and the forward P/E of 17 against a $615.74 analyst target proves the recent drawdown was an overreaction.
I would avoid it if fixed-price program charges keep resurfacing (the Q2 2025 $1.6B in reach-forward losses is still fresh), if working capital keeps whipsawing free cash flow, and if defense budget politics get messy heading into FY27 appropriations.
My lean: cautiously constructive, but not in a rush. The dividend keeps paying, the backlog is real, and the peer group already priced in a lot of pain. I want one clean quarter of guidance-in-line execution before I add. Anyone catching this knife on the Iran headline learned an expensive lesson: geopolitics is not a stock thesis.
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NATO chief Mark Rutte is calling it the “Trump Trillion”—more than $1.21 trillion in additional defense spending by NATO allies since President Donald Trump‘s first term.
The ‘Trump Trillion’ Behind Defense StocksAccording to a White House fact sheet released following the NATO Summit in Ankara, allied nations have committed an additional $1.21 trillion to defense spending since Trump’s first term, including more than $120 billion in new spending last year alone.
The administration also highlighted that NATO allies purchased more than $54 billion in U.S. defense equipment in 2025, supporting American manufacturers and workers while shifting more of the alliance’s defense burden to Europe.
The White House says the latest commitments build on NATO members’ pledge to increase defense spending to 5% of GDP by 2035, a target Trump has repeatedly championed.
Lockheed, RTX, Boeing and Northrop Are Already Seeing the BenefitsThe summit wasn’t just about spending targets. It also produced a series of new defense partnerships involving some of America’s largest contractors.
Among the announcements:
The Investment CaseThe White House also announced roughly $3 billion in new defense-related deals and joint ventures unveiled during the summit, saying the initiatives will strengthen the U.S. defense industrial base while opening additional export opportunities for American companies.
While many of the agreements focus on expanding manufacturing capacity in Europe, they also reinforce demand for U.S.-designed defense systems at a time when NATO members are committing to significantly higher military spending.
For investors, that could mean the story extends well beyond a single summit. If NATO members follow through on their long-term spending commitments, companies such as Lockheed Martin, RTX, Boeing and Northrop Grumman could remain at the center of one of the largest defense procurement cycles in decades.
Image via Shutterstock
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Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Northrop Grumman (NOC - Free Report) , which belongs to the Zacks Aerospace - Defense industry, could be a great candidate to consider.
When looking at the last two reports, this defense contractor has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 2.14%, on average, in the last two quarters.
For the last reported quarter, Northrop Grumman came out with earnings of $6.14 per share versus the Zacks Consensus Estimate of $6.08 per share, representing a surprise of 0.99%. For the previous quarter, the company was expected to post earnings of $7 per share and it actually produced earnings of $7.23 per share, delivering a surprise of 3.29%.
Price and EPS Surprise
For Northrop Grumman, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Northrop Grumman has an Earnings ESP of +0.22% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on July 21, 2026.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Andrew King, General Partner at Bastille Capital and President of Future Union, told CNBC on July 10 that the defense trade has decoupled from the traditional playbook. Record Pentagon budgets would ordinarily be expected to lift America’s largest defense contractors. Instead, Lockheed Martin, Northrop Grumman, and other household names have fallen sharply since February, even as military spending reaches new highs.
King argues capital is rotating into private companies and allied international operators that own the fastest-growing pieces of modern warfare. “We got very frothy in the defense market. And there’s other ways to play other than just the public markets. What you’re seeing is a rotation into other public companies,” King said.
Record Defense Spending Is No Longer Lifting the Usual Winners Lockheed Martin (NYSE:LMT | LMT Price Prediction) has declined 20.34% from its February 20, 2026 close of $650.58 to $518.26.
And Northrop Grumman (NYSE:NOC) has fared even worse, down 25.87% over the same window.
That underperformance sits against a Department of War budget request that keeps climbing. The FY 2027 plan totals $1.45 trillion, up $440.894 billion from FY 2026 enacted levels, with $52.9 billion for Critical Munitions and $59.7 billion in procurement and RDT&E funding for vital space capabilities. The money is flowing, but investors have decided the incumbents are no longer the best way to invest in the upcoming opportunity.
The New Defense Winners May Be Hiding Among 300 Allied Companies King proposed a new framework for investors considering investments in defense companies. “We are coming out with the Allied Defense League, which specifically focuses on the 300 companies that are the most important to compete against adversarial countries, many of which… one third of the list is international, which we’ve never seen before,” he said.
92 of the 300 companies are international, up from 84 last year, a structure King describes as unprecedented. That mirrors what Goldman Sachs Asset Management flagged as a 2026 megatrend, citing the +€800 billion in EU defense spending in the ReArm Europe Plan 2030 as evidence that allied balance sheets are now doing structural work.
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Recent contract flow reinforces the pattern. Raytheon UK’s Omnia Training consortium just secured a £2 billion, 15-year contract from the UK Ministry of Defence to build the British Army’s Collective Training System, with 270 new UK jobs created. The transaction is a template for how allied budgets now anchor programs that once ran through Washington first.
Space Has Become Its Own Defense Battleground King still sees the US as a winner. “The US still owns the AI, the compute, the strategic resources, but increasingly, the allies own the strike verticals, the iterable drone type things that are outside of the core,” he said. His conclusion for portfolio construction: “Instead of thinking US hegemony, now we’re thinking this is an allied play. That’s how we win in the future.”
Space is treated as its own vertical. “Space is [an] entire own category. SpaceX is one of those eight. SpaceX is dominated by the US, as you might imagine. But there’s other players that are coming out like ICEYE and others that do some very interesting things… really critical to the allied play,” King said. As an example of space companies coming into the public light, Blue Origin is raising $10 billion at a $130 billion valuation, its first outside capital.
What to Watch Next The FY 2027 budget request totals $1.45 trillion; Europe is committing more than €800 billion through its ReArm Europe Plan; and allied governments are awarding multibillion-dollar contracts for munitions, drones, space, training, and other strategic capabilities.
King’s argument is which stocks are benefiting from this increased military spending. Lockheed Martin has fallen more than 20% since February 20, Northrop Grumman has declined nearly 26%, and the leveraged DFEN aerospace and defense fund is down approximately 15% over the same period. Meanwhile, private companies, specialized operators, and international allies are gaining importance across the eight defense verticals King tracks.
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Prime defense contractor Northrop Grumman Corp. will release its second-quarter 2026 earnings on Tuesday, July 21. After an exceptional performance in early 2026, NOC stock has now given up all of its gains, raising the question of whether the stock is once again in buy territory. In this update, I'll share my current expectations for Northrop Grumman's second-quarter earnings report and discuss what I'll be paying particular attention to.
Northrop Grumman Corporation is positioned for growth as Arctic defense and NATO surveillance demand accelerates, highlighted by recent Triton drone orders. NOC's backlog reached $96B, with diversified growth in missile defense, space systems, and autonomous platforms, supported by robust U.S. and allied defense budgets. Significant investments, including $2.5B for B-21 Raider production, will pressure near-term cash flows but underpin long-term earnings visibility.
Defense stocks are the rare corner of the market where geopolitical anxiety, fiscal generosity and multi-year revenue visibility all converge at once. With the Fiscal Year 2027 investment request by the Department of War totaling $756.8 billion, and President Trump declaring that “our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” the demand backdrop heading into July is as durable as it gets. Goldman Sachs frames it similarly, arguing that economic security will be a prominent theme in 2026, with NATO defense commitments and reindustrialization creating substantial opportunities for active managers.
Three names anchor that thesis. Each has a tool-verified data point supporting the “resilient” label, each has a clear bull case for July, and each carries a real risk worth pricing in.
Lockheed Martin (NYSE: LMT) Lockheed Martin (NYSE:LMT | LMT Price Prediction) trades at $545.70 as of July 2, up nearly 8% over the past month. The stock is up around 10% over the trailing year, but some recent weakness has created a more interesting entry. Forward P/E sits at 17, with a dividend yield of 3% and a Wall Street average target of $624.11.
The bull case is built on backlog and program lock-in. Lockheed ended 2025 with a record $194 billion backlog, representing more than 2.5 years of sales, and management reaffirmed FY2026 guidance of $77.5 to $80.0 billion in sales and diluted EPS of $29.35 to $30.25. Critically, the Department of War signed multi-year framework agreements to scale Patriot, THAAD, and PrSM production by three to four times current rates, and Lockheed just landed a $4.8 billion PAC-3 missile production contract. CEO Jim Taiclet said the year’s start “reinforces our confidence in Lockheed Martin’s continued operational and financial growth in the year ahead.”
Risk: Q1 2026 EPS of $6.44 missed the $6.70 estimate, dragged by a $125 million F-16 unfavorable profit adjustment. Fixed-price contract execution remains the perennial caveat.
Northrop Grumman (NYSE: NOC) Northrop Grumman (NYSE:NOC) has been the worst-performing of the three this year, down 12% year-to-date to $504.60. That underperformance is the opportunity. Forward P/E sits at 18, the dividend yields 2%, and the analyst target of $695.05 implies meaningful upside from current levels.
The resilience case is the cleanest of the group. Q1 2026 saw EPS of $6.14 beat the $6.06 estimate, revenue grew 4% to $9.88 billion, and net income climbed 82% year-over-year. The B-21 Raider swung from a $183 million operating loss to $305 million in operating income, a turnaround that should compound as production expands. Backlog stands at $95.61 billion with a 1.10 book-to-bill.
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The most telling signal came from the boardroom. On May 20, 2026, ten Northrop directors purchased 349 shares each at $552.17, a coordinated buy that strongly suggests management views the stock’s pullback as a gift. CEO Kathy Warden described the quarter as reflecting “our ability to deliver in today’s unprecedented global demand environment.”
Risk: The B-21 LRIP program still has memory of a $477 million loss provision, and government shutdown risk is explicitly not in guidance.
RTX Corp (NYSE: RTX) RTX (NYSE:RTX) is the only one of the three to raise full-year guidance after Q1, and its price action shows it. The stock trades at $188.54, up 32% over the past year and 4% in the past month. Forward P/E of 27 is the highest of the trio, but the growth profile justifies it. The yield is 1%, and analysts carry a target of $215.73.
The bull case is execution. Q1 2026 adjusted EPS of $1.78 beat the $1.52 estimate by 17%, the eighth consecutive quarterly beat. RTX then raised its FY2026 outlook to adjusted sales of $92.5 to $93.5 billion and adjusted EPS of $6.70 to $6.90. Backlog finished Q1 at $271 billion, split $162 billion commercial and $109 billion defense. Recent wins include a $1.1 billion U.S. Navy AIM-9X contract and a $515 million SPY-6 radar contract. CEO Chris Calio cited “organic sales and adjusted operating profit growth across all three segments” as the reason for the raise.
Risk: The Pratt & Whitney powder metal matter requiring accelerated GTF fleet inspections remains a multi-year cash drag, and tariff exposure at Collins and Pratt is a watch item.
What to Watch in July Q2 earnings land in late July for all three. Lockheed and Northrop report on the same calendar week, with RTX close behind. The question is whether RTX raises again, whether Northrop’s B-21 momentum is sustainable, and whether Lockheed can put the F-16 charge behind it. With backlogs collectively approaching $560 billion and a defense budget trajectory that only points higher, the setup favors continued operational delivery over multiple expansion.
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Key Takeaways Northrop Grumman is expanding missile capabilities through advanced tactical and defense technologies.NOC's portfolio includes precision-strike weapons, sensors, command-and-control and defense systems.SiAW and AARGM-ER target contested environments and advanced enemy air defense systems. Northrop Grumman (NOC - Free Report) continues to strengthen its position in the missile market through the development of advanced missile systems and precision-strike technologies for the U.S. military and allied nations. The company offers a broad portfolio of missile and missile defense solutions designed to address evolving battlefield requirements and counter increasingly sophisticated threats.
NOC continues to expand its missile capabilities through the development of advanced tactical missiles, missile defense technologies and next-generation munitions. Its portfolio includes precision-strike weapons, advanced sensors, command-and-control systems and integrated air and missile defense solutions that support a wide range of military missions. These capabilities enable the company to help customers detect, track and defeat emerging threats while improving operational effectiveness.
Among its advanced missile programs are the Stand-in Attack Weapon (SiAW) and the Advanced Anti-Radiation Guided Missile Extended Range (AARGM-ER). The SiAW is designed to strike heavily defended and time-sensitive targets in contested environments and features an open-architecture design that allows for rapid upgrades as threats evolve. Meanwhile, the AARGM-ER is a supersonic, air-launched tactical missile developed to destroy advanced enemy air defense systems through improved propulsion, extended range and an enhanced warhead.
With governments around the world continuing to invest in advanced missile systems and strengthen their defense capabilities, demand for modern missile technologies is expected to remain healthy. Northrop Grumman's broad portfolio of missile solutions, combined with its expertise in advanced electronics, sensors and integrated defense systems, positions it well to benefit from long-term growth opportunities in the global missile market.
Other Companies Expanding Their Missile CapabilitiesOther aerospace and defense companies expanding their missile capabilities are discussed below:
RTX Corporation (RTX - Free Report) : The company develops advanced missile systems such as the Patriot air and missile defense system and the SM-6 missile, which continue to witness strong global demand. RTX also provides advanced sensors, interceptors and command-and-control technologies that strengthen layered missile defense capabilities.
Lockheed Martin (LMT - Free Report) : Through its broad missile portfolio, the company manufactures systems such as the Patriot Advanced Capability-3 (PAC-3), Terminal High Altitude Area Defense (THAAD), Joint Air-to-Surface Standoff Missile (JASSM), Multiple Launch Rocket System (MLRS) and Javelin tactical missile, supporting U.S. and allied defense modernization efforts.
The Zacks Rundown for NOCShares of NOC have surged 3.1% in the past year compared with the industry’s 7.1% growth.
Image Source: Zacks Investment Research
The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.63X compared with its industry’s average of 2.66X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2026 and 2027 earnings has moved north over the past 60 days.
Space stopped being a government-only game years ago. It’s now a real, investable industry – satellites beaming broadband to ships and planes, earth-imaging companies selling data to farms and defense contractors, and launch providers racing to put more payloads into orbit than ever before.
SpaceX’s record-breaking IPO has pulled a lot of new eyes into the sector this year. And the follow-up question a lot of investors are now asking is a smart one: what are the best space stocks to buy now if you want exposure without betting everything on a single name?
This piece walks through what space stocks actually are, the strongest names heading into the second half of 2026, how to buy them, and which space ETF options let you spread the risk rather than pick individual winners.
What Are Space Stocks?The Best Space Stocks to Buy in 2026The space sector has never had more publicly traded names worth paying attention to – and the SpaceX IPO has only accelerated that conversation. But not every space stock is built the same way. Some are pure-play growth bets riding next-generation technology with no profits yet. Others are decades-old defense primes that happen to build satellites on the side. And a few sit somewhere in between, pivoting from launch providers into full-stack space platforms.
The listed stocks below cover that full spectrum – from high-risk, high-upside plays to steadier, dividend-paying anchors. Understanding what each company actually does, and where it sits on the risk curve, is the starting point for figuring out which ones belong in your portfolio.
Rocket Lab (RKLB)Rocket Lab built its name on the Electron rocket, launching small satellites with a reliability and cadence that no competitor at that size could match. Now it’s making a much bigger move.
Rocket Lab recently announced an $8 billion acquisition of Iridium Communications – a cash-and-stock deal that gives it a profitable, recurring-revenue satellite network with over 2.55 million subscribers across government, defense, aviation, and maritime markets. That’s a major strategic shift: instead of being purely a launch provider, Rocket Lab is building toward being a vertically integrated space platform with real cash flow attached.
As of July 1, RKLB is trading around $104, with a market cap of approximately $60 billion and a 52-week range between $33.73 and $151.00 – a range that tells you everything you need to know about the volatility here. Wall Street is broadly bullish, with 14 buy ratings, 4 holds, and zero sells from analysts covering the stock. RKLB trades on the NASDAQ.
AST SpaceMobile (ASTS)AST SpaceMobile is trying to do something genuinely novel: build a satellite network that connects directly to ordinary smartphones – no special hardware, no satellite phone, just your existing device. If it works at scale, the addressable market is essentially every person on earth who’s ever had a dropped call.
Planet Labs (PL)Planet Labs runs the largest fleet of Earth-imaging satellites in the world, founded in 2010 by three former NASA scientists. It’s less flashy than ASTS or RKLB – it doesn’t launch rockets or pitch dead-zone elimination – but it has something most space stocks don’t: customers who actually need what it sells right now.
The company posted record annual revenue of $308 million, with contracted backlog up 79% year-over-year to more than $900 million. Planet Labs stock is up 37% year to date, and it’s a major holding across multiple space ETFs precisely because daily satellite imagery has become critical infrastructure for agriculture, defense, and disaster response. PL is currently trading around $29 on the NYSE.
Lockheed Martin (LMT)Lockheed is the closest thing to a “safe” space stock on this list. Its space division builds GPS III satellites, the Orion crew capsule for NASA’s Artemis program, and missile warning systems – all backed by one of the largest defense balance sheets in the world. You won’t get explosive upside here, but you get steady, diversified exposure to government space spending without the volatility that comes with the pure-play names. LMT trades on the NYSE.
Northrop Grumman (NOC)Northrop is best known in space circles as the prime contractor behind the James Webb Space Telescope, alongside solid rocket motor production and space logistics vehicles. Like Lockheed, it’s a defense prime rather than a growth story – but it offers reliable exposure to long-cycle government space contracts for investors who want the sector without the wild price swings. NOC trades on the NYSE.
Pros and Cons of Space StocksPros:Cons:Space ETFs: The Diversified RouteETFs pool investor money to buy a basket of stocks, trading on an exchange just like an individual stock. They exist precisely to solve the problem this sector creates – picking individual space stocks means accepting concentrated, single-company risk. The SPAC wave of 2021 taught investors a painful lesson about that when names like Astra and Momentus lost 80–90% of their value.
A few options stand out for 2026:
Procure Space ETF (UFO) is the most concentrated pure-play option, weighting satellite operators and launch companies heavily – including Rocket Lab and AST SpaceMobile.
ARK Space Exploration & Innovation ETF (ARKX) takes an actively managed approach under Cathie Wood’s team, mixing space names with broader “space-adjacent” robotics and data plays, though its returns have generally lagged the more concentrated pure-play funds.
For investors who want defense-anchored stability blended in, iShares Aerospace & Defense (ITA) and SPDR S&P Kensho Final Frontiers (ROKT) combine primes like Lockheed and Northrop with smaller space names – trading steadier growth for lower volatility.
Bottom LineWhichever route you choose, go in expecting volatility. This is still a fast-moving, early-stage industry – and that’s exactly what makes it interesting.
FAQsWhat are the best space stocks right now?
Rocket Lab (RKLB) and AST SpaceMobile (ASTS) for growth and upside, Planet Labs (PL) for earth-imaging data revenue, and Lockheed Martin (LMT) or Northrop Grumman (NOC) for steadier, defense-backed exposure.
Which space companies are publicly traded?
Rocket Lab, AST SpaceMobile, Planet Labs, Lockheed Martin, and Northrop Grumman are all publicly traded. SpaceX joined them in June 2026 after its IPO.
Are space stocks worth investing in?
For investors comfortable with volatility, yes – the sector has real and growing revenue backlog and genuine technological progress. For risk-averse investors, the swings in smaller names can be brutal, and an ETF may be a smarter fit than picking individual stocks.
Is Rocket Lab a good investment in 2026?
It has strong momentum, a fresh $8 billion Iridium acquisition that brings real cash flow, and broad analyst support. But the stock has also been extremely volatile, swinging 40-50% in both directions within months. How much volatility you can stomach will ultimately shape whether RKLB belongs in your portfolio.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
Key Takeaways Northrop Grumman won a $312.3M Navy contract for SEWIP Block 3 production through August 2029.NOC's SEWIP Block 3 adds advanced electronic attack to counter hostile radar and anti-ship missiles.Northrop Grumman continues investing in next-generation electronic warfare for naval defense systems. Northrop Grumman (NOC - Free Report) continues to strengthen its position in the Surface Electronic Warfare Improvement Program (SEWIP) market through its advanced electronic warfare (EW) technologies and long-standing partnership with the U.S. Navy. The company's Mission Systems business develops next-generation EW solutions that help naval forces detect, identify and counter increasingly sophisticated threats, improving survivability and mission effectiveness in contested maritime environments.
A key example is Northrop Grumman's latest contract from the U.S. Navy. In June 2026, the company secured a $312.3 million modification contract to exercise an option for the production of SEWIP Block 3 Hemisphere and Quadrant systems. Awarded by the Naval Sea Systems Command, the contract supports the continued production of advanced electronic warfare systems for U.S. Navy ships and is scheduled for completion by August 2029.
SEWIP Block 3 represents the latest evolution of the Navy's AN/SLQ-32 electronic warfare system. It provides advanced electronic attack capabilities that enable warships to detect, identify, analyze and counter hostile radar and anti-ship missile threats. By integrating offensive and defensive electronic warfare functions, the system enhances fleet survivability while allowing Navy vessels to respond more effectively to increasingly complex electromagnetic threats.
With naval forces worldwide investing heavily in electronic warfare and electromagnetic spectrum dominance, demand for advanced systems such as SEWIP is expected to remain strong. Northrop Grumman's continued investments in next-generation electronic warfare technologies, combined with its proven expertise in delivering mission-critical naval defense systems, position it well to benefit from long-term defense modernization initiatives and the growing focus on maritime electronic warfare capabilities.
Other Stocks to Keep on the WatchlistOther aerospace and defense companies expanding their electronic warfare capabilities are discussed below:
RTX Corporation (RTX - Free Report) : The company is a leading provider of advanced electronic warfare systems. Its Next Generation Jammer equips the EA-18G Growler with advanced electronic attack capabilities, enabling it to disrupt and degrade multiple enemy radar systems simultaneously.
General Dynamics (GD - Free Report) : The company offers advanced electronic warfare solutions through its defense portfolio. Its Tactical Electronic Warfare System enables military personnel to detect, identify and locate enemy signals while disrupting hostile communications and improving battlefield situational awareness.
The Zacks Rundown for NOCShares of NOC have lost 1.5% in the past year compared with the industry’s 6% growth.
Image Source: Zacks Investment Research
The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.55X compared with its industry’s average of 2.62X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2026 and 2027 earnings has moved north over the past 60 days.
Defense primes are doing what they were built to do: compound through political noise. With the FY2027 Department of War budget request landing at $1.45 trillion, a $440.9 billion or 44% increase from the FY 2026 enacted level, and NATO members committing to 5% of GDP on defense by 2035, the multi-year demand picture has rarely looked more locked in. Goldman Sachs Asset Management frames it bluntly: “Geopolitical tension is increasing along with new and emerging threat vectors” while economic security takes center stage in 2026 portfolios.
The sector is delivering on that backdrop. Each of the three U.S. primes below has reaffirmed or raised 2026 guidance, sits on a record or near-record backlog, and is positioned inside the Department of War’s new framework-agreement contracting model. Here are three resilient defense stocks worth a closer look in June.
Lockheed Martin (LMT) Lockheed Martin (NYSE:LMT | LMT Price Prediction) trades around $496.61, with shares up 5% year to date and 10% over the past year. The forward multiple sits at roughly 17x, the dividend yields 3%, and the Wall Street consensus target is $625.16.
The bull case rests on backlog and contracting reform. Lockheed closed 2025 with a record $194 billion backlog, more than 2.5 years of sales, and CEO Jim Taiclet pointed to a “landmark, seven-year framework agreement for PAC-3 missiles” as the template. Taiclet said the new framework deals across Patriot, THAAD, and PrSM “will in turn support strategic investments in production infrastructure… to increase production rates of these critical systems by 3-4 times current rates.” Management reaffirmed FY2026 EPS guidance of $29.35 to $30.25 and free cash flow of $6.50 billion to $6.80 billion. The company also delivered its 23rd consecutive year of dividend increases.
The caveat: Q1 2026 was bumpy. EPS of $6.44 missed the $6.70 consensus, segment margins compressed from 12% to 10%, and a $125 million unfavorable F-16 adjustment reminded investors that fixed-price contract exposure cuts both ways. Free cash flow was negative $291 million in the quarter.
Northrop Grumman (NOC) Northrop Grumman (NYSE:NOC) is the contrarian pick of the trio. Shares trade near $508.19 and are down 9% year to date, creating a setup where the trailing P/E of about 16x looks compelling against an analyst consensus target of $696.95. The dividend yields 2%.
Q1 2026 was the inflection. Adjusted EPS of $6.14 beat the $6.06 estimate, revenue rose 4% to $9.88 billion, and Aeronautics Systems swung from a $183 million operating loss to $305 million in operating income as the prior-year B-21 charge rolled off. Mission Systems margin expanded to 15% from 13%, net income jumped 82% year over year, and the backlog stood at $95.6 billion. CEO Kathy Warden flagged “robust bookings, mid-single-digit organic sales growth.” Management reaffirmed FY2026 sales of $43.5 billion to $44.0 billion and MTM-adjusted EPS of $27.40 to $27.90. The B-21 Raider production ramp and the Sentinel ICBM program represent multi-decade revenue streams that no future administration will unwind.
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The caveat: Q1 free cash flow was negative $1.82 billion, and a $71 million unfavorable EAC adjustment on the GEM 63XL rocket motor after a launch anomaly is a reminder of program-execution risk. Space Systems revenue fell 3% on the NGI wind-down.
RTX (RTX) RTX (NYSE:RTX) is the momentum name. Shares trade at $185.55, up 30% over the past year, with a forward P/E near 26x, a dividend yield of 1%, and a consensus target of $215.73.
Q1 2026 was the fourth consecutive EPS beat. Adjusted EPS of $1.78 beat the $1.52 consensus, revenue rose 9% to $22.08 billion, and free cash flow expanded 65% year over year to $1.31 billion. Raytheon adjusted operating profit jumped 25% on Patriot and naval munitions demand. CEO Chris Calio said RTX is “increasing adjusted sales and EPS in our full year outlook” citing “the strength we’re seeing in our defense business.” The raised 2026 outlook calls for adjusted sales of $92.5 billion to $93.5 billion and EPS of $6.70 to $6.90, with backlog at $271 billion ($162 billion commercial, $109 billion defense), the largest of the three primes.
The caveat: the Pratt & Whitney powder metal matter still requires accelerated GTF fleet inspections, and tariff headwinds plus pending DOJ deferred prosecution agreements and SEC investigations remain unresolved overhangs. At 34x trailing earnings, the multiple leaves little room for execution stumbles.
What to Watch Next The catalyst path through the back half of 2026 runs through framework-agreement awards, FY2027 budget appropriations, and continued allied procurement. With the FY 2027 procurement line set to rise to $257.591 billion versus $163.626 billion enacted for FY 2026, the multi-year demand signal that anchors all three theses is strengthening. If global defense spending stays at multi-decade highs, the resilience descriptor earns its keep.
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The mid-term elections likely going against President Trump and the GOP is the biggest reason Richard Safran sees behind the U.S. defense stock slump seen in Northrop Grumman (NOC) and RTX Corp. (RTX) among others. In Europe, he believes the continent has underinvested in defense and attributes the rally in companies like Rheinmetall (RNMBY) as a catch-up trade — until those shares also slid in recent months.
The SpaceX IPO has investors asking a reasonable question: at a valuation somewhere between $1 trillion and $2 trillion, is the hype real, or is the market getting ahead of itself? Rob Spivey and Joel Litman of Altimetry Research say the answer is both—and that for most investors, there are cleaner opportunities sitting right next to the SpaceX story.
Altimetry applies uniform accounting to strip out the distortions in standard GAAP reporting. When Spivey and Litman ran that lens over SpaceX NASDAQ: SPCX's S-1, what they found was a profitable business with three distinct segments, each worth valuing on its own terms.
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Breaking Down the ValuationSpaceX Today
$153.23 +0.23 (+0.15%)
As of 06/26/2026 04:00 PM Eastern
52-Week Range$147.11▼
$225.64Price Target$212.67
The launch business, what SpaceX calls its space segment, generates roughly a 12% return on assets, which is the U.S. corporate average, but strong for a capital-heavy operation with an 80%+ share of U.S. commercial launches.
That segment may double or triple in scale; Spivey estimates it could be worth around $120 billion.
Starlink is where the numbers get compelling. With $11 billion in revenue and a 30% return on assets, three times the corporate average, it already looks like a premium business. The addressable market isn't the entire $1.5 trillion global telecom industry, as Elon Musk has suggested, but a more realistic $100 billion opportunity still implies a 10x growth runway. Comparable satellite businesses have reached 60% returns on assets. If Starlink gets there, Spivey puts the segment at around $600 billion.
The xAI compute segment is where the bull case hinges. It's losing money now, but recent agreements to supply compute capacity to major hyperscalers suggest a path to becoming the go-to infrastructure partner for AI scaling demand. In a strong-case scenario, that segment could be worth $600–$700 billion on its own.
Add it up, and Spivey sees a range of $1.3 to $1.5 trillion—not the irrational number skeptics claim, but not the discount that buyers would want either. "I could see as much downside as upside from here," Spivey said. His position: don't short it, but don't chase it.
The Irreplaceable Equipment MakerASML Today
$1,794.62 -46.56 (-2.53%)
As of 06/26/2026 04:00 PM Eastern
52-Week Range$683.48▼
$1,959.04Dividend Yield0.60%
P/E Ratio64.37
Price Target$1,772.63
For a better entry point in the AI infrastructure story, Spivey points to ASML Holding N.V. NASDAQ: ASML. The Dutch semiconductor equipment maker produces the extreme ultraviolet lithography machines that Taiwan Semiconductor NYSE: TSM and other chipmakers need to manufacture the most advanced chips, for NVIDIA NASDAQ: NVDA, memory providers, and anyone else building at the frontier.
The moat is genuinely hard to overstate. ASML is the only company in the world that builds this equipment, and the machines are so complex that a Chinese manufacturer that bought one, disassembled it trying to reverse-engineer it, and ultimately had to call ASML back to put it together again. That story tells you something real about competitive position.
On a uniform accounting basis, ASML's return on assets runs closer to 22%—not the 15% that as-reported figures suggest. The company is in the middle of a major production ramp, shifting its mix toward higher-end equipment that carries fatter margins. That mix shift is why it has consistently beaten earnings expectations. And as AI infrastructure build-out continues, whether data centers are terrestrial or eventually orbital, demand for ASML's equipment only grows.
The stock trades at a high nominal price, but Spivey's argument is straightforward: price per share is irrelevant. What matters is the earnings relative to that price, and on a uniform basis, ASML's forward P/E is closer to 45x against 20%-plus earnings growth potential. For investors who can't get comfortable with the share price, fractional shares are the practical answer.
The Space Defense SleeperNorthrop Grumman Today
NOC
Northrop Grumman
$499.84 +0.51 (+0.10%)
As of 06/26/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$489.26▼
$774.00Dividend Yield1.98%
P/E Ratio15.64
Price Target$700.53
The second buy on the list looks nothing like an AI play at first glance.
Northrop Grumman Corporation NYSE: NOC is a defense giant, but a quarter of its business and a disproportionate share of its profits come from space.
The company builds satellites and has a launch capability that most investors don't associate with the brand.
Spivey's case is that SpaceX's success isn't just good for SpaceX. It's catalyzing the entire space economy, pulling more commercial and government investment into the sector.
Northrop Grumman is one of the few contractors with the technical depth and established relationships to capture that demand.
It also benefits from the broader defense spending story—U.S. budget increases, allied spending ramp-ups, and the need to replenish equipment used in recent Middle East operations. The administration's stated priorities—blue-water Navy, missiles, space—map directly to Northrop Grumman's core business.
As-reported numbers make Northrop Grumman look like a barely-above-cost-of-capital business at 5–6% return on assets. Uniform accounting puts it closer to 12%. With a uniform P/E of around 26x and the market pricing in roughly 5% annual earnings growth, Litman and Spivey see that estimate as far too conservative given the tailwinds. The stock doesn't need a massive multiple expansion; earnings growth alone could drive meaningful upside.
The Power BottleneckGE Vernova Today
$1,045.74 -39.73 (-3.66%)
As of 06/26/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$482.20▼
$1,181.95Dividend Yield0.19%
P/E Ratio30.46
Price Target$1,089.88
GE Vernova Inc. NYSE: GEV rounds out the buy list, and this one is directly tied to the AI power race. Data centers can be built in 15 months. The large gas turbines—the heavy industrial equipment that generates the electricity those data centers need—have a five-year-plus backlog. GE Vernova makes them.
That supply constraint gives GE Vernova pricing power that has fundamentally changed its economics. Historically, the company operated on a razor-and-blades model, selling turbines at thin margins and capturing value through decades of service contracts.
Now, with demand far outstripping supply, it's getting premium pricing on the hardware itself. Margins are expanding from what was a 5% return on assets when the company spun out of GE toward the 20%+ range that industry peers have achieved.
The company is simultaneously ramping turbine capacity—targeting 20 gigawatts in 2024 compared to 10–12 gigawatts before the spinoff, potentially reaching 30 gigawatts—and doubling capacity in its electrification segment, which covers the transformers and grid infrastructure needed to move power from generation to the data center. The recent earnings beat was driven by exactly this combination: higher volumes and better margins landing together. Neither trend is short-term.
2 Names to AvoidAST SpaceMobile, Inc. NASDAQ: ASTS is the name that investors in the direct-to-cellular satellite space have been watching closely. The company's ambition, enabling satellite connectivity through standard mobile phones, without specialized hardware, is compelling.
AST SpaceMobile Today
$71.57 +5.95 (+9.06%)
As of 06/26/2026 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$36.08▼
$133.86Price Target$85.09
Its challenge is that Starlink is already pursuing the same market from a position of profitability and a denser satellite constellation, while AST SpaceMobile is currently burning cash at a negative 14% return on assets.
The bigger problem is valuation. At roughly $30 billion, the market is already pricing AST SpaceMobile to achieve 20–30% returns on assets, which essentially assumes the company captures a dominant share of the global direct-to-cellular market and that carriers like Verizon Communications Inc. NYSE: VZ and AT&T Inc. NYSE: T back it exclusively over Starlink. Spivey's view is that AT&T and Verizon will want AST SpaceMobile as a competitive check on SpaceX—a stocking horse, like Advanced Micro Devices NASDAQ: AMD relative to Intel NASDAQ: INTC—but that role implies a ceiling on the business, not a path to $100 billion-plus.
Tesla Today
$379.71 +4.59 (+1.22%)
As of 06/26/2026 04:00 PM Eastern
52-Week Range$288.77▼
$498.83P/E Ratio348.36
Price Target$403.07
Tesla, Inc. NASDAQ: TSLA is the harder case to make, given how many investors have deep conviction in Elon Musk's long-term vision. Litman's argument isn't about the vision. It's about what the stock is already priced to deliver. To justify the current valuation, Tesla needs to achieve a 50% return on assets—higher than Coca-Cola NYSE: KO, higher than almost any company in any sector, in a business where Chinese manufacturers compete with government-backed subsidies, near-zero IP enforcement costs, and pricing that Western automakers can't match.
Tesla's current return on assets is around 6%, which is reasonable given the competitive dynamics. Getting from 6% to 50% would require a near-complete elimination of that competition or a business transformation—through Optimus robotics or other ventures—that neither history nor current economics supports. Even in the bull case, Litman sees Tesla as a good industrial business, worth a 20% return on assets. That's still far from what the market is pricing.
The SpaceX merger scenario, in which Musk rolls Tesla's battery and robotics assets into the broader SpaceX ecosystem, could change the math. Spivey and Litman say they wouldn't be surprised if it happens. But that's a different bet than the one Tesla shareholders are currently making.
Should You Invest $1,000 in SpaceX Right Now?Before you consider SpaceX, you'll want to hear this.
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Key Takeaways NOC's aerospace presence, solid liquidity and low debt make it a strong Aerospace investment pick.NOC has a $95.61B backlog, with 35% expected to convert into sales over the next 12 months.NOC is positioned to benefit from higher U.S. defense funding and global demand for defense solutions. Northrop Grumman’s (NOC - Free Report) robust presence in the aerospace market, solid liquidity and low debt are strong positives. Given its growth prospects, NOC makes for a solid investment option in the Aerospace sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History of NOCThe Zacks Consensus Estimate for 2026 earnings per share is pegged at $27.95, which indicates year-over-year growth of 6.1%.
The consensus estimate for 2026 sales is $43.97 billion, which indicates year-over-year growth of 4.8%.
NOC’s long-term (three-to-five years) earnings growth rate is pegged at 5.3%.
It delivered an average earnings surprise of 7.11% in the last four quarters.
NOC Stock’s Debt PositionCurrently, the company’s total debt-to-capital is 45.71%, better than the industry’s average of 47.13%.
NOC’s times interest earned (TIE) ratio at the end of the first quarter of 2026 was 9.23. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
NOC’s LiquidityNOC’s current ratio at the end of the first quarter of 2026 was 1.15. A current ratio greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.
NOC’s Strong Defense Position Supports Long-Term GrowthNorthrop Grumman is well-positioned to capitalize on rising global defense spending and growing demand for advanced military capabilities. The company ended the first quarter of 2026 with a robust backlog of $95.61 billion, providing strong revenue visibility, with approximately 35% expected to convert into sales over the next 12 months and nearly 60% over the next two years. Continued contract wins across high-priority areas, including missile defense, unmanned aircraft, defense electronics, space systems and cyber security, should support steady organic growth in the years ahead.
The company is also expected to benefit from increasing U.S. defense investments and expanding international opportunities. Higher Pentagon funding is likely to drive demand for Northrop Grumman's advanced missile warning satellites, air and missile defense systems and other critical defense technologies, particularly as the U.S. government remains focused on strengthening national security. At the same time, allied nations are increasing investments in integrated air and missile defense, ground-based radars and Intelligence, Surveillance and Reconnaissance (ISR) capabilities. With defense products serving customers in 25 countries and growing opportunities across Europe and the Middle East, Northrop Grumman remains well-positioned to capitalize on rising global demand for advanced defense solutions.
NOC Stock’s Price PerformanceShares of NOC have gained 3.3% in the past year compared with the industry’s 4.2% growth.
Image Source: Zacks Investment Research
Other Stocks to ConsiderSome other top-ranked stocks from the same sector are Heico (HEI - Free Report) , Woodward (WWD - Free Report) and Archer Aviation (ACHR - Free Report) . HEI currently sports a Zacks Rank #1 (Strong Buy). WWD and ACHR carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heico delivered an average earnings surprise of 13.82% in the last four quarters. The consensus estimate for HEI’s fiscal 2026 earnings stands at $5.78 per share, which suggests year-over-year growth of 18%.
Woodward delivered an average earnings surprise of 16.97% in the last four quarters. The Zacks Consensus Estimate for WWD’s fiscal 2026 earnings is pinned at $9.34 per share, which indicates year-over-year growth of 35.6%.
Archer Aviation delivered an average earnings surprise of 7.89% in the last four quarters. The consensus estimate for ACHR’s 2026 loss is pegged at $1.02 per share.
On June 24, 2026, we present a DCF analysis for Northrop Grumman Corp NOC , a company currently facing a challenging price performance context with a year-to-date decline of 9.3% and a one-month drop of 7.2%. Below are key highlights from our analysis:
DCF Earnings-based intrinsic value of $435.16 compared to the current price of $513.22 (margin of safety: -17.9%) DCF Free Cash Flow (FCF)-based intrinsic value of $290.99, indicating a second opinion on valuation GF Score™ of 86/100, suggesting a high reliability of the DCF inputs What Is NOC Worth? DCF Earnings-Based Model The DCF earnings-based model for Northrop Grumman Corp utilizes a two-stage approach to estimate intrinsic value. In the first stage, we project earnings growth over the next ten years at a rate of 8.2%, followed by a terminal growth phase at a reduced rate of 4% for the subsequent ten years. The discount rate applied is 11%, derived from the risk-free rate and equity risk premium.
Parameter Value Current EPS (TTM, excl. non-recurring) $30.60 10-Year Growth Rate 8.2% 10-Year Treasury Rate 4.49% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% The calculation summary for the two-stage DCF model is as follows:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 8.2%, discounted at 11% $266.60 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $168.56 Intrinsic Value Growth + Terminal $435.16 With the current price at $513.22, the intrinsic value of $435.16 indicates that Northrop Grumman is fairly valued, with a margin of safety of -17.9%. It is important to note that GuruFocus uses EPS excluding non-recurring items, as research suggests that stock prices correlate more closely with earnings than with free cash flow. For further details, visit the NOC DCF Calculator.
What Does the Free Cash Flow DCF Say? The Free Cash Flow (FCF)-based intrinsic value for Northrop Grumman stands at $290.99. When comparing this to the earnings-based intrinsic value of $435.16, the two models diverge significantly. The FCF model suggests that the stock is modestly overvalued, with a margin of safety of -76.4%.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for Northrop Grumman is calculated at $557.59, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure, which considers historical trading multiples, past business growth, and future performance estimates. While the DCF earnings model suggests fair valuation, the FCF model indicates overvaluation, whereas GF Value™ suggests the stock is undervalued. This divergence highlights the importance of considering multiple valuation methods. For more information, visit the GF Value™ page.
What Does NOC's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns based on backtested data from 2006 to 2021.
Metric Rating GF Score™ 86/100 Financial Strength 6/10 Profitability 8/10 Growth 7/10 Valuation 10/10 Momentum 7/10 With a predictability rank of 0/5 stars, it is important to note that higher predictability ratings typically indicate that the DCF model is more reliable for the stock. For further insights, visit the NOC stock page.
Key Assumptions and Limitations It is crucial to recognize that DCF models are highly sensitive to growth rate and discount rate assumptions. Stocks with low predictability ratings, such as Northrop Grumman, tend to produce less reliable DCF estimates. Additionally, the terminal growth rate of 4% is a simplifying assumption that may not reflect future market conditions accurately.
What This Means for Investors In synthesizing the three valuation models—DCF earnings, DCF FCF, and GF Value™—we find that Northrop Grumman Corp presents a mixed picture. While the DCF earnings model suggests fair valuation, the FCF model indicates modest overvaluation, and the GF Value™ suggests it is undervalued. Overall, the consensus leans towards the stock being fairly valued.
For the full DCF analysis, visit the NOC DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is NOC's intrinsic value based on DCF?
According to our analysis, the earnings-based intrinsic value is $435.16, while the FCF-based intrinsic value is $290.99.
Is NOC overvalued or undervalued?
The DCF earnings model suggests fair valuation, while the FCF model indicates modest overvaluation. The GF Value™ suggests it is undervalued, creating a mixed consensus.
How reliable is the DCF model for NOC?
Given the predictability rank of 0/5, the DCF model for NOC may be less reliable compared to stocks with higher predictability ratings.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
June 18, 2026 09:00 ET | Source: Northrop Grumman Corporation
FALLS CHURCH, Va., June 18, 2026 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE: NOC) announced today that its second quarter 2026 financial results will be released on Tuesday, July 21, 2026, prior to the market opening. The earnings announcement, and accompanying earnings presentation, will be available on the company’s website at http://investor.northropgrumman.com.
Earnings Call Webcast
The company will host a live, audio only, earnings call webcast at 9:30 a.m. ET the same day. This webcast can be accessed on the company’s website at http://investor.northropgrumman.com. A replay of the webcast will be available shortly after the call and will remain available for a limited time.
About Northrop Grumman
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day.
Defense contractors have spent the past year doing exactly what they are designed to do: Deliver predictable cash flow, lean on multi-year backlogs and reprice higher as geopolitical risk refuses to fade. With $52.9 billion earmarked for critical munitions in the FY 2027 Department of War budget request and defense ranked the standout ETF theme of 2025, the sector backdrop heading into mid-2026 favors scale, contract visibility, and production capacity.
Below are three names worth a closer look this month, each with a tool-verified data point grounding the thesis.
Lockheed Martin: The Backlog Anchor Lockheed Martin (NYSE:LMT | LMT Price Prediction) trades at $525.02 as of June 10, with shares up 10% year to date and 13% over the past year. The forward P/E sits at 17, the dividend yield at roughly 3% and the analyst target price stands at $625.16.
The bull case rests on a record $194 billion backlog representing more than 2.5 years of sales and the recently signed multi-year framework agreements with the Department of War for Patriot, THAAD, and PrSM. CEO Jim Taiclet said the deals will “increase production rates of these critical systems by three to four times current rates,” locking in demand against a budget environment that wants more munitions, faster. FY2026 guidance was reaffirmed at $77.5 billion to $80.0 billion in sales and diluted EPS of $29.35 to $30.25, with operating profit expected to grow approximately 25% year over year.
The caveat is real. Q1 2026 EPS of $6.44 missed the $6.70 consensus, free cash flow turned negative at -$291 million, and a $125 million unfavorable F-16 charge reminded investors that fixed-price program risk has not gone away. The backlog buys patience; execution still needs to improve.
Northrop Grumman: The B-21 Inflection Northrop Grumman (NYSE:NOC) trades at $542.14, down 4% year to date but still up 13% over 12 months. Trailing P/E sits at 17, forward P/E at 20, and dividend yield at 2%. The analyst target of $696.95 implies meaningful upside, with four Strong Buys and 10 Buys against nine holds. Sentiment screens bullish at a composite score of 64.72.
The thesis is straightforward: B-21 has flipped from drag to driver. Aeronautics Systems swung from a $183 million operating loss in Q1 2025 to $305 million in operating income in Q1 2026, tied to the absence of a prior-year $477 million B-21 loss provision. Backlog hit a record $95.61 billion, CEO Kathy Warden cited an “unprecedented global demand environment”, and the company secured a U.S. Air Force agreement to expand B-21 production capacity. FY2026 guidance calls for sales of $43.5 billion to $44.0 billion and MTM-adjusted EPS of $27.40 to $27.90.
The risk: Q1 operating cash flow came in at -$1.656 billion on working capital timing, and the B-21 remains a fixed-price development program. A $71 million unfavorable EAC adjustment on GEM 63XL is a reminder that any single program can bite.
RTX: The Diversified Compounder RTX (NYSE:RTX) — parent company of Raytheon, Pratt & Whitney and Collins Aerospace — trades at $177.41. Shares are down 3% year to date but have gained 30% over the past year. Forward P/E is 26, dividend yield is 2%, and the analyst target is $215.73.
RTX is the only one of the three to raise 2026 guidance this cycle. Q1 adjusted EPS of $1.78 beat the $1.52 consensus by 17%, marking the fourth consecutive quarterly beat. Management lifted full-year sales guidance to $92.5 billion to $93.5 billion and adjusted EPS to $6.70 to $6.90. The backlog of $271 billion, split $162 billion commercial and $109 billion defense, is the largest of the three primes and the most diversified. CEO Chris Calio pointed to “organic sales and adjusted operating profit growth across all three segments,” with Raytheon adjusted operating profit up 25% on Patriot, GEM-T and naval munitions demand and Pratt commercial aftermarket up 19%.
The caveat involves the Pratt & Whitney powder metal matter requiring accelerated GTF fleet inspections and removals, ongoing tariff headwinds at Collins and Pratt, and pending DOJ deferred prosecution agreements and SEC investigations. The valuation also leaves less margin for error than the other two.
This infographic provides a detailed financial overview for Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX (RTX), including their performance, key metrics, and market outlooks as of June 10, 2026. What to Watch Next Three contracts, three risk profiles, one shared tailwind. Lockheed offers the highest backlog-to-sales ratio and the cleanest yield. Northrop carries the most operational leverage as B-21 scales. RTX provides the broadest diversification and the only raised 2026 outlook.
With $60 billion allocated to munitions development and procurement in the FY 2027 request and framework agreements rewiring how Washington buys weapons, June sets up as a month where execution, not orders, will separate the leaders.
Gene Munster of Deepwater Asset Management and Elon Musk biographer Walter Isaacson have floated the idea that Tesla (NASDAQ: TSLA | TSLA Price Prediction) and SpaceX could combine within the next decade. This remains speculation rather than a deal. For Boeing (NYSE: BA), the hypothetical lands harder than for any other company.
Boeing: A Fragile Recovery Meets a Hypothetical Megacompetitor Boeing is mid-turnaround. Q1 2026 revenue hit $22.217 billion, up 14% year over year, with a core loss per share of $0.20 and free cash flow of negative $1.454 billion. Commercial Airplanes ran a 6.1% negative operating margin. The backlog is a record $695 billion, and debt was cut to $47.2 billion from $54.1 billion.
CEO Kelly Ortberg commented: “We’re building on our momentum with a strong start to the year and growing record-breaking backlog across our business, while supporting our customers with inspiring missions like Artemis II.”
The stock paints a less inspiring picture. Shares closed most recently at $215.01, down 9.2% in a week and 1.0% year to date. A Polymarket contract puts the probability of a U.S. federal stake in Boeing by year-end at 29.5%.
Where a Musk Megamerger Would Bite A combined Tesla and SpaceX would fuse launch dominance with vertical-integration manufacturing and artificial intelligence (AI). Boeing’s direct exposure spans Starliner versus Crew Dragon, SLS subcontracting versus Starship, satellite manufacturing versus Starlink, NSSL defense launch contracts, and ULA, which Boeing owns 50% with Lockheed. Layer in talent flight risk, capital markets advantage if SpaceX goes public through the merger, and Tesla Optimus crossing into defense robotics, and the threat compounds.
Insiders show limited conviction. On February 19, 2026, Ortberg parted with 5,016.643 shares at $236.71, alongside 10 other executives in a five-day window.
Boeing’s Better-Executing Peers Lockheed Martin (NYSE: LMT) trades at $526.63, up 8.9% year to date. CEO Jim Taiclet described framework deals to “increase production rates of these critical systems by 3-4 times current rates.” Lockheed won a $1.5 billion Peru F-16 contract and a $4.8 billion PAC-3 award.
Northrop Grumman (NYSE: NOC) trades at $556.34, up 18.1% over one year. Aeronautics swung to a $305 million operating profit on B-21 ramp, and the company has opened 20+ new facilities and added more than 2 million square feet of manufacturing space in 24 months.
The Moat Boeing Still Owns Boeing beat Airbus on 2025 orders for the first time since 2018, landed a Delta deal, and saw Citi and Wolfe lift price targets. The commercial duopoly, KC-46, F-15EX, Apache, Chinook, and deep Department of Defense relationships are not easily disrupted by a Silicon Valley fusion. Ortberg argues the new defense budget is “really funding additional production of existing systems, which should be low risk for us.”
The bear case is clear: weak space and defense margins, a publicly embarrassing Starliner program, and Commercial Airplanes still bleeding. A unified Musk competitor would compound pressure on Boeing at exactly the wrong moment.
May 21, 2026 09:08 ET | Source: Northrop Grumman Corporation
FALLS CHURCH, Va., May 21, 2026 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE: NOC) will participate in Bernstein’s 42nd Annual Strategic Decisions Conference on Thursday, May 28. Kathy Warden, chair, chief executive officer and president, will present beginning at 10:00 a.m. Eastern time. The presentation will be webcast live at http://investor.northropgrumman.com.
Northrop Grumman is a leading global aerospace and defense technology company. Our pioneering solutions equip our customers with the capabilities they need to connect and protect the world, and push the boundaries of human exploration across the universe. Driven by a shared purpose to solve our customers’ toughest problems, our employees define possible every day.
Note: Statements to be made at the conference contain or may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “strategy,” “project,” “forecast,” “achieve,” “believe,” “estimate,” “guidance,” “outlook,” “trends,” “goals,” “confident,” “on track” and similar expressions generally identify these forward-looking statements. These forward-looking statements speak only as of the date when made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements after the date of the conference, except as required by applicable law. Forward-looking statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. A discussion of these risks and uncertainties is contained in the Company’s filings with the Securities and Exchange Commission.
A month has gone by since the last earnings report for Northrop Grumman (NOC - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Northrop Grumman due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Northrop Grumman Corporation before we dive into how investors and analysts have reacted as of late.
Northrop Grumman reported first-quarter 2026 adjusted earnings of $6.14 per share, which beat the Zacks Consensus Estimate of $6.08 by 1%. The bottom line also improved 1.3% from the year-ago quarter’s level of $6.06.
The year-over-year growth can be attributed to higher revenues and lower operating costs and expenses during the quarter.
NOC’s Total SalesNOC’s total sales of $9.88 billion in the first quarter beat the Zacks Consensus Estimate of $9.79 billion by 1%. The top line also improved 4.4% from $9.47 billion reported in the year-ago quarter.
Northrop Grumman’s BacklogThe company’s total backlog was $95.61 billion at the end of the first quarter compared with $95.68 billion at the end of fourth-quarter 2025.
NOC’s Segmental DetailsAeronautics Systems: This segment’s sales of $3.28 billion rose 16.7% year over year, driven by higher sales from B-21 and other restricted programs, as well as increased volume on the E-130J TACAMO program.
The unit’s operating income totaled $305 million against the operating loss of $183 million in the first quarter of 2025. Its operating profit margin also improved to 9.3% from an operating loss margin of 6.5% in the first quarter of 2025.
Mission Systems: Sales in this segment increased 1.9% to $2.86 billion. This was driven by ramp-up on restricted airborne radar programs and higher volume on marine systems programs.
The unit’s operating income increased 19.9% to $433 million. The operating margin expanded 220 basis points (bps) to 15.1%.
Defense Systems: This segment’s sales rose 5.2% year over year to $1.90 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.
The unit’s operating income improved 2.8% year over year to $184 million. The operating margin contracted 20 bps to 9.7%.
Space Systems: Sales in this segment declined 3.4% to $2.48 billion due to the winding down of work on the restricted space and NGI programs, as well as lower volume on the Graphite Epoxy Motor 63XL program.
The segment’s operating income decreased 17% year over year to $235 million. The operating margin also contracted 150 bps to 9.5%.
Northrop Grumman’s Operational UpdateTotal operating income during the quarter totaled $989 million, reflecting a significant increase from $573 million in the prior-year quarter.
NOC’s Financial ConditionNorthrop Grumman’s cash and cash equivalents as of March 31, 2026, totaled $2.09 billion, down from $4.40 billion as of Dec. 31, 2025.
Long-term debt (net of the current portion) amounted to $14.41 billion compared with $15.16 billion as of Dec. 31, 2025.
Net cash outflow from operating activities totaled $1.66 billion during the first three months of 2026, compared with $1.57 billion a year ago.
Northrop Grumman’s 2026 GuidanceThe company expects its revenues to be in the range of $43.50-$44.00 billion. The Zacks Consensus Estimate for sales is pegged at $43.87 billion, higher than the midpoint of the company’s guided range.
NOC expects adjusted earnings to be in the band of $27.40-$27.90 per share. The consensus estimate for earnings is pegged at $28.19 per share, above the company’s guided range.
Northrop Grumman projects to generate adjusted free cash flow in the band of $3.10-$3.50 billion.
How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.
VGM ScoresCurrently, Northrop Grumman has a average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Northrop Grumman has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Northrop Grumman, Home Depot, and McCormick & Company offer attractive risk/reward after significant underperformance versus the AI-driven market. NOC benefits from defense spending tailwinds, a robust order book, and a 1.7% yield, trading at 21x earnings with high-single-digit EPS growth expected. HD trades below its historical average P/E, maintains resilient guidance, and offers a 3.1% yield, with upside potential as housing stabilizes.
Key Takeaways BAE Systems rose 23.2% in six months, while Northrop Grumman fell 2.1%.BAE Systems is investing $135M in U.S. facility upgrades and delivered NGP sensor components.Northrop Grumman delivered its 1,000th SABR radar and signed an Estonia air-defense modernization MoU. As global tensions continue to rise, countries are increasing their defense budgets and investing more in military equipment and advanced technologies. This trend is creating strong growth opportunities for defense companies like BAE Systems plc (BAESY - Free Report) and Northrop Grumman (NOC - Free Report) .
BAE Systems develops defense, aerospace and security products and is known for platforms such as the Eurofighter Typhoon aircraft, CV90 combat vehicles and Astute-class submarines. On the other hand, Northrop Grumman is a diversified aerospace and defense company with operations across space, aeronautics, defense and cybersecurity. Its products include missile defense systems, satellites, autonomous technologies and cyber solutions.
As governments continue to modernize their defense capabilities, both BAESY and NOC are expected to benefit from higher military spending and growing demand for advanced defense systems.
But which of these two defense stocks currently offers the stronger investment opportunity? Let’s take a closer look.
Tailwinds for BAESYBAE Systems is benefiting from strategic investments and program developments that strengthen its long-term growth outlook. The company continues to expand its production capabilities to support rising defense demand and improve delivery efficiency.
In May 2026, BAE Systems announced a $135 million investment to upgrade facilities in Austin, TX, and Hudson, NH. Fully funded by the company, the initiative is expected to enhance infrastructure, accelerate the delivery of critical systems and software and support U.S. military readiness.
Moreover, BAE Systems recently delivered key sensor components for the Next Generation Overhead Persistent Infrared Polar (NGP) program, which will provide the U.S. Space Force with advanced missile warning, technical intelligence and battlespace awareness capabilities. This milestone keeps the program on track for full payload assembly, with Flight Unit 1 expected to launch in 2028.
These developments reflect BAE Systems’ continued focus on strengthening its defense capabilities and expanding its presence across key military and space programs.
Tailwinds for NOCNorthrop Grumman continues to benefit from strong defense demand, supported by technology advancements and strategic partnerships that strengthen its market position.
In May 2026, the company delivered its 1,000th APG-83 Scalable Agile Beam Radar (SABR) system, a major milestone for one of its key defense technologies. The advanced radar system upgrades existing fighter aircraft, such as the F-16, with next-generation sensing capabilities similar to those used in advanced jets like the F-22 and F-35. With features including ground mapping, target tracking and electronic signal detection, SABR enhances battlefield awareness while allowing software-based upgrades to address evolving threats.
Moreover, Northrop Grumman signed a memorandum of understanding with TOCI to support the modernization of Estonia’s integrated air and missile defense systems. Through this collaboration, the company aims to provide tailored defense solutions by leveraging its expertise in Integrated Air and Missile Defense (IAMD), including its proven Integrated Battle Command System (IBCS). The partnership is expected to strengthen Estonia’s defense readiness amid rising regional security concerns.
These developments highlight Northrop Grumman’s focus on expanding its advanced defense capabilities and reinforcing its presence in key global defense programs.
How do EPS Estimates Compare for BAESY & NOC?The Zacks Consensus Estimate for BAESY’s 2026 earnings per share (EPS) is pegged at $4.56, which indicates year-over-year growth of 16.3%. The consensus estimate for 2026 revenues is pegged at $44.65 billion, which indicates year-over-year growth of 56.8%. The company’s 2026 and 2027 EPS estimates have moved north over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2026 EPS is pegged at $27.95, which indicates year-over-year growth of 6.1%. The consensus estimate for 2026 revenues is pegged at $43.97 billion, which indicates year-over-year growth of 4.8%. The company’s 2026 and 2027 EPS estimates have moved south over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: BAESY vs. NOCBAESY has outperformed NOC over the past six months. Shares of BAESY gained 23.2% compared with shares of NOC, which lost 2.1%.
Image Source: Zacks Investment Research
BAESY’s Valuation More Attractive Than NOCNOC shares are expensive on a relative basis, with its forward 12-month Price/Sales (P/S F12M) being 1.75X compared with BAESY’s P/S F12M of 1.74X.
Image Source: Zacks Investment Research
ConclusionBoth BAE Systems and Northrop Grumman are strong defense companies with solid government ties and a wide range of products. However, BAE Systems appears to have the edge over NOC for now. Its earnings estimates have been rising and its stock has delivered better returns than Northrop Grumman over the past six months.
Although NOC remains a reliable defense player offering a stable financial base, BAE Systems looks more attractive for investors seeking growth and momentum.
BAESY currently carries a Zacks Rank #2 (Buy), while NOC has a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here.
