Recent performance snapshot
Northrop Grumman (NOC) has seen mixed share performance recently, with a 1 day return of 1.12%, about a 1.26% decline over the past week and roughly a 5.90% decline over the past month.
Over longer periods, the stock shows a 0.25% decline across the past 3 months, while year to date total return stands at 13.59% and the 1 year total return is 25.09%.
See our latest analysis for Northrop Grumman.
With the share price at $665.26, recent negative short term share price returns contrast with stronger longer term total shareholder returns, suggesting momentum has cooled even as longer horizon holders have still been rewarded.
If you are comparing Northrop Grumman with other defense and infrastructure related names, it can help to scan the wider market using a focused list of 31 power grid technology and infrastructure stocks
With Northrop Grumman shares around $665.26, modest recent declines sit against strong multi year total returns. This raises a key question: is the stock now trading below its true value, or is the market already pricing in future growth?
Most Popular Narrative: 10% Undervalued
At $665.26, the most followed valuation narrative places Northrop Grumman’s fair value closer to $736, which creates a gap investors will want to understand.
The ramp-up of advanced autonomous and integrated systems such as Beacon and IBCS, combined with ongoing investments in solid rocket motor capacity (targeting a near-doubling by 2029), positions the company to capitalize on high-growth, higher-margin market segments, thereby enhancing future operating margins and underlying cash flow.
Curious what revenue path, margin profile and earnings multiple are baked into that valuation gap? The narrative leans on specific growth, profitability and capital return assumptions that might surprise you.
Result: Fair Value of $736 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this depends on major defense programs and supportive policy, so budget shifts or program delays could quickly challenge the idea that it is 10% undervalued.
Find out about the key risks to this Northrop Grumman narrative.
Another angle on value: cash flows point lower
While analyst models cluster around a fair value near $736, the SWS DCF model points to a future cash flow value of $524.52 per share, which sits well below the current $665.26 price. That gap suggests less of a clear bargain and more of a trade off between growth expectations and cash flow caution. Which lens do you trust more?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Northrop Grumman for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 60 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed signals on value and growth can feel uncomfortable, so do not wait around. Review the data, stress test the assumptions, then weigh up the 4 key rewards and 2 important warning signs.
Ready to hunt for more ideas?
If Northrop Grumman has your attention, do not stop there. Use the screeners below to spot other opportunities that match your return and risk preferences.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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