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Northrop Grumman (NOC) Gains as the Market Falls: What You Need to Know

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Northrop Grumman (NOC) closed the last trading day at $541.19, moving +1.2% from the previous trading session. That move topped the S&P 500’s 0.41% daily loss. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq lost 6.67%.

As of today, shares of the defense contractor have gained 1.88% over the past month. At the same time, the aerospace sector lost 0.41%, while the S&P 500 lost 4.4%.

Northrop Grumman will look to show strength ahead of its next earnings release, which is expected to be on January 26, 2023. On that day, Northrop Grumman is expected to report earnings of $6.60 per share, which would represent year to year. 10% growth. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $9.66 billion, up 11.81% from the year-ago period.

Zacks consensus estimates for NOC’s full year call for earnings of $24.64 per share and revenue of $36.23 billion. These results would represent year-over-year variations of -3.86% and +1.57%, respectively.

Investors might also notice recent changes in analyst estimates for Northrop Grumman. These revisions generally reflect the latest short-term trading trends, which may change frequently. Therefore, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Our research shows that these estimate changes are directly correlated to short-term stock prices. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive track record of outperformance verified by external audits, with #1 stocks generating an average annual return of +25% since 1988 Over the past month, the Zacks Consensus EPS estimate fell 0.04%. Northrop Grumman currently holds a Zacks rank of #3 (Hold).

Valuation is also important, so investors should note that Northrop Grumman has a Forward P/E ratio of 21.7 at this time. This valuation marks an imperceptible difference compared to the average Forward P/E of its sector of 21.7.

Additionally, it should be mentioned that NOC has a PEG ratio of 6.5. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. The NOC industry had an average PEG ratio of 2.2 at yesterday’s close.

The Aeronautics – Defense industry is part of the Aeronautics sector. This group has a Zacks Industry Rank of 194, which places it in the bottom 24% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to track all of these stock movement metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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