Guggenheim raises Northrop Grumman stock price target on growth outlook

Investing.com - Guggenheim recently upgraded its price target on Northrop Grumman shares, bringing it to $640 from $612, after reviewing the company's third-quarter results. Maintaining a Buy rating, this move reflects Guggenheim's belief in the company's growth potential. The stock is currently trading at $534, showing a significant 7.7% increase over the past week.

Northrop Grumman, a defense contractor, has maintained its 2026 revenue outlook but provided initial 2027 guidance projecting 5% to 7% top-line growth, a significant acceleration from the previous 5.5% rate. The firm predicts this growth rate will continue to increase in the following years. This projected growth is primarily driven by the Department of Defense's base budget, hinting at the possibility of additional growth if supplemental funding becomes available.

For the 2027 fiscal year, the company anticipates margin expansion and a 16% increase in core free cash flow at the midpoint. The 2027 earnings-per-share are expected to decrease due to pension costs, but overall, the core operating performance is expected to improve. Guggenheim believes these results, outlook, and budgetary projections should alleviate investor concerns.

Subscribers to InvestingPro can access over 10 additional exclusive tips for Northrop Grumman, including a perfect Piotroski Score of 9 and a 22-year streak of dividend increases. The firm reaffirmed its Buy recommendation for Northrop Grumman stock. Recent news highlights Northrop Grumman's strong third-quarter 2026 earnings, which exceeded Wall Street expectations, with adjusted earnings of $7.89 per share compared to the estimated $7.18 per share.

The company's revenue for the quarter matched forecasts at $11.12 billion. Following these results, Northrop Grumman also revised its full-year earnings guidance. Additionally, Baird upgraded the company's stock rating from Neutral to Outperform, citing robust quarter performance and increasing the price target to $675 from $552.

These recent positive developments underscore Northrop Grumman's financial health and operational efficiency. This report was generated with AI assistance and reviewed by an editor. For additional details, visit the Terms and Conditions.