Northrop Grumman Q2 revenue edges past estimates; 2026 outlook lifted

Northrop Grumman Corp.

Northrop Grumman Corp.

NOC

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Overview

  • U.S. defense contractor's Q2 revenue rose 5% yr/yr, slightly beating analyst expectations

  • Diluted EPS for Q2 was $7.68, down from prior year due to divestiture gain in 2025

  • Company raised 2026 sales and MTM-adjusted EPS guidance on strong demand and record backlog


Outlook

  • Northrop Grumman raises 2026 sales guidance to $43.75 bln-$44.25 bln

  • Company lifts 2026 MTM-adjusted EPS guidance to $28.60-$29.10

  • Northrop Grumman reaffirms guidance for operating income and adjusted free cash flow


Result Drivers

  • SALES GROWTH - Q2 sales rose 5% yr/yr, led by increases across Aeronautics, Defense, Mission, and Space Systems segments, driven by continued strong demand for global capabilities

  • RECORD BACKLOG - Net awards of $20 bln increased backlog to a company record of $105 bln, reflecting robust demand for products

  • DIVESTITURE IMPACT - Prior-year Q2 net earnings included a $150 mln gain from the training services business divestiture, affecting year-over-year EPS comparison


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Slight Beat*

$10.88 bln

$10.81 bln (18 Analysts)

Q2 EPS

$7.68

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 15 "strong buy" or "buy", 9 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the aerospace & defense peer group is "buy"

  • Wall Street's median 12-month price target for Northrop Grumman Corp is $660.00, about 26% above its July 20 closing price of $523.96

  • The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 24 three months ago


Reuters Recommended Reads

  • July 20 - Lockheed to make cheaper Patriot interceptors as air defense demand soars

  • July 20 - Private investors must pile cash into defence to fill public funding gap, executives say

  • July 20 - Trump orders tightening of defense supply-chain waiver rules


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