Northrop Grumman (NYSE:NOC) Shares Gap Down - Should You Sell?

Key Points

• Northrop Grumman shares fell sharply: The stock opened at $483.00 after closing at $504.61, trading well below its 50-day and 200-day moving averages.
• Analyst sentiment remains moderately positive: Despite several price-target cuts, the consensus rating is “Moderate Buy,” with an average target of $658.29.
• Recent fundamentals were solid: Quarterly earnings of $7.68 per share exceeded estimates, revenue rose 5.1% year over year, and the company supports a $9.88 annual dividend yielding about 2.0%.

Northrop Grumman Corporation (NYSE:NOC - Get Free Report)'s share price gapped down before the market opened on Wednesday. The stock had previously closed at $504.61, but opened at $483.00. Northrop Grumman shares last traded at $484.5310, with a volume of 245,732 shares.

Analyst Upgrades and Downgrades

A number of research firms recently commented on NOC. Jefferies Financial Group dropped their price target on Northrop Grumman from $620.00 to $580.00 and set a "hold" rating for the company in a research note on Friday, June 26th. Raymond James Financial reissued an "outperform" rating on shares of Northrop Grumman in a report on Monday, June 15th. TD Cowen boosted their target price on shares of Northrop Grumman from $550.00 to $590.00 and gave the company a "hold" rating in a research report on Wednesday, August 19th. JPMorgan Chase & Co. dropped their target price on shares of Northrop Grumman from $635.00 to $600.00 and set a "neutral" rating for the company in a research report on Thursday, July 23rd. Finally, Sanford C. Bernstein cut their price target on shares of Northrop Grumman from $653.00 to $620.00 and set a "market perform" rating for the company in a report on Wednesday, September 23rd. Two investment analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and eight have issued a Hold rating to the stock. According to MarketBeat, Northrop Grumman currently has a consensus rating of "Moderate Buy" and a consensus target price of $658.29.

Northrop Grumman Price Performance

The company has a 50 day moving average price of $540.81 and a 200-day moving average price of $572.49. The company has a market cap of $68.97 billion, a price-to-earnings ratio of 15.43, a P/E/G ratio of 2.97 and a beta of -0.11. The company has a quick ratio of 1.06, a current ratio of 1.17 and a debt-to-equity ratio of 0.81.

Northrop Grumman (NYSE:NOC - Get Free Report) last issued its quarterly earnings data on Tuesday, July 21st. The aerospace company reported $7.68 earnings per share for the quarter, topping the consensus estimate of $6.82 by $0.86. Northrop Grumman had a net margin of 10.48% and a return on equity of 24.25%. The company had revenue of $10.88 billion for the quarter, compared to analysts' expectations of $10.80 billion. During the same quarter in the previous year, the firm posted $8.15 earnings per share. Northrop Grumman's revenue for the quarter was up 5.1% on a year-over-year basis. Northrop Grumman has set its FY 2026 guidance at 28.600-29.100 EPS. As a group, equities research analysts predict that Northrop Grumman Corporation will post 28.97 EPS for the current fiscal year.

Northrop Grumman Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, September 16th. Shareholders of record on Monday, August 31st were paid a $2.47 dividend. This represents a $9.88 annualized dividend and a yield of 2.0%. The ex-dividend date of this dividend was Monday, August 31st. Northrop Grumman's payout ratio is 31.39%.

Insider Buying and Selling

In other news, Director Mark Welsh, III sold 95 shares of the business's stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $547.53, for a total transaction of $52,015.35. Following the completion of the sale, the director owned 4,393 shares in the company, valued at $2,405,299.29. The trade was a 2.12% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.21% of the stock is owned by insiders.

Hedge Funds Weigh In On Northrop Grumman

Several large investors have recently bought and sold shares of NOC. BlackRock Inc. bought a new position in Northrop Grumman during the second quarter valued at $6,001,616,000. Bank of America Corp DE purchased a new stake in shares of Northrop Grumman during the 2nd quarter valued at approximately $1,298,141,000. Capital World Investors boosted its holdings in Northrop Grumman by 39.4% in the 4th quarter. Capital World Investors now owns 3,434,041 shares of the aerospace company's stock worth $1,958,151,000 after buying an additional 970,029 shares during the period. Bank of New York Mellon Corp purchased a new position in Northrop Grumman in the 2nd quarter valued at approximately $376,135,000. Finally, Corient Private Wealth LP purchased a new position in Northrop Grumman in the 2nd quarter valued at approximately $44,039,000. 83.40% of the stock is currently owned by institutional investors.

About Northrop Grumman

Northrop Grumman Corporation NYSE: NOC is a global aerospace and defense company that develops and produces systems for government and commercial customers, with the U.S. Department of Defense and other government agencies representing its primary markets. Its work spans advanced aircraft, autonomous systems, space systems, missile defense, command and control, cybersecurity, and other mission-critical technologies.

The company's offerings include strategic and tactical aircraft, unmanned aerial vehicles, aircraft systems, satellites, spacecraft, launch vehicles, missile-warning and missile-defense systems, secure communications, and cyber and information systems.

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