Northrop Grumman (NOC) Stock Forecast & Price Target

Northrop Grumman demonstrated robust financial performance in 2Q25, reporting total sales of $10.4 billion, reflecting a year-over-year increase of 1% and exceeding market expectations by 3.3%. The company's international sales grew significantly, with a 32% increase year-over-year for 3Q25 and a solid 20% year-to-date performance, highlighting strong demand across multiple segments, particularly in Defense Systems, which saw a remarkable 55% year-over-year growth in international sales. Overall, the diversified defense contractor exhibits a positive outlook due to its expanding international presence and sustained growth driven by key contracts and segment performance, particularly in aeronautics and defense systems.

Northrop Grumman's financial analysis reveals a concerning decline in free cash flow (FCF), reported at $637 million, which reflects a significant 42% year-over-year decrease and fell short of analysts' expectations of $1.13 billion. While the Mission Systems segment experienced a 14% growth, the Space Systems' sales suffered a 12% decline, highlighting underlying challenges in key areas of the business. Furthermore, the sentiment around future guidance remains mixed, with potential budget cuts and competitive threats looming, leading to apprehension among investors about the company's financial trajectory and the ramifications for its 2025 forecasts.