Shares of Northrop Grumman Inc (NYSE:NOC) is up 24% this year, significantly outperforming the broader S&P500, down 23%. Even if we look at the longer term, NOC stock, with returns of 56% from levels seen in late 2017, has fared better than the S&P 500, up 38%. The value of NOC’s stock now looks somewhat at levels around $480, as shown below.

This 56% rise in NOC shares since late 2017 can be attributed to 1. Northrop Grumman Inc. revenue Increased 34% to $35.0 billion over the past 12 months, compared to $26.0 billion in 2017.2. 17% increase in the company’s profit/loss ratio to 2.1 times in revenue currently in arrears, compared to 1.8 times in 2017, and 3. An 11% decrease in total shares outstanding to $155 million, driven by $6.8 billion spent on share repurchases during the period. An increase in revenue and a decrease in outstanding shares mean that Northrop Grumman
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Revenue per share is up 51% to $225 over the past twelve months, up from $149 in 2017. Why did Northrop Grumman’s stock move? More details.

Northrop Grumman’s revenue growth in recent years can be attributed to its aerospace segment, which has benefited from rising sales of strategic missiles. Notably, the company’s order backlog has nearly doubled in recent years, from $42 billion in 2017 to $80 billion today, driven by growing demand for space systems.

Defense stocks in general have done well this year, given the ongoing Ukraine-Russia conflict. The award of new business with a potential increase in defense spending, especially by NATO members, bodes well for Northrop Grumman. However, the company is facing headwinds due to supply chain disruptions and rising costs. However, Northrop Grumman has seen operating margin rise steadily from 18.5% in 2017 to 28.1% in 2021, before declining to 22.9% over the past twelve months. our Operating income of Northrop Grumman The dashboard has more details.

Given near-term headwinds, Northrop Grumman is expected to see just 2% growth this year to more than $36.3 billion (according to consensus estimates). Assuming 155 million current shares (reported Q2 2022), we arrive at projected earnings per share of $234 for the full year 2022. At current levels, NOC stock is trading at 2.0 times forward forecast revenue, compared to the last three-year average of 1.7 times. Now, given the Russian-Ukrainian conflict and the expected rise in defense spending, an upward revision in the multipliers trade makes sense. However, with North Oil already up 24% this year, and its P/E above the historical average, we don’t expect significant growth from current levels.

While the NOC stock price seems appropriate, it is useful to know how to do it Northrop Grumman Peers Fare on important metrics. You’ll find other valuable comparisons of companies across industries at Peer comparisons.

Moreover, the Covid-19 crisis has caused many price pauses, which can provide attractive business opportunities. For example, you will be surprised how counterintuitive the stock valuation is Textron vs. Aaron.

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