Northrop Grumman (NOC)
Industrials · NYSE · US
Fundamentals
Valuation and ratings
Northrop Grumman trades at $518.65, which is 129% below the $1,187.19 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 54 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 16.9 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Northrop Grumman
Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. It operates through four segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The Aeronautics Systems segment designs, develops, produces, integrates, sustains, and modernizes aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic, surveillance and reconnaissance systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, integrates, and produces strategic deterrent systems, tactical weapons, and missile defense solutions; and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. This segment also offers strategic missiles; integrated all-domain command and control systems; precision strike weapons; tactical solid rocket motors, and high-speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions, and advanced fuzes; and sustainment, operation, and modernization. The Mission Systems segment provides command, control, communication and computer, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; advanced communications and network systems; microelectronics; navigation and positioning sensors; maritime power, propulsion, and payload launch systems; cyber solutions; and intelligence processing systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; and launch vehicles and related propulsion systems. The company was founded in 1939 and is based in Falls Church, Virginia.
NOC passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Lewis Sanders, Sanders Capital, LLC$1.27B · 1.5% of book
- Capital Research Global, Capital Research Global Investors$830.12M · 0.1% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$227.36M · 0.1% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$215.74M · 0.2% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$141.78M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Northrop Grumman (NOC) undervalued?
Against our discounted cash flow estimate of $1,187.19, NOC at $518.65 is 129% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own NOC?
5 of the institutions we track reported a position in NOC in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is NOC's P/E ratio?
NOC trades at 16.9 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for NOC, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.