BofA Securities raised its price target on Northrop Grumman Co. (NYSE: NOC) to $750.00 from $685.00 and retained a Buy rating on the stock. The research house pointed to Northrop’s approach to a shifting defense industry landscape, noting the company appears to be managing the tension between its legacy strengths and the need to meet newer commercial and agile demands.
Shares of Northrop were trading at $678.74 at the time of the update, roughly 0.99% below a 52-week high of $683.01, after delivering a 41.9% total return over the past 12 months. InvestingPro data cited by the research note shows Northrop trading at a relatively low price-to-earnings multiple given near-term earnings growth, with a PEG ratio of 0.32.
BofA Securities analyst Ronald Epstein framed the current environment for legacy defense primes as an "identity crisis" - a choice point between leaning on decades of heritage versus altering strategies to compete with non-traditional new entrants. Epstein’s characterization underpinned the firm’s reassessment of Northrop’s valuation and strategic positioning.
At the same time, the firm reduced its adjusted earnings-per-share forecasts for Northrop Grumman, attributing the cuts to a weaker outlook for the company’s Mission Systems segment and to share count considerations. The lowered EPS estimates were reflected in BofA’s updated model even as the firm raised its target price.
Northrop, a major U.S. defense contractor with extensive military and aerospace capabilities, also reported fourth-quarter 2025 financials that exceeded analyst projections. The company posted adjusted EPS of $7.23 versus a projected $6.99, and revenue of $11.7 billion compared with an expected $11.61 billion. Those results were cited by other research firms in their own reassessments.
Vertical Research Partners, for example, increased its price target for Northrop to $688 from $625 and maintained a Hold rating following the quarterly report, describing the results as a consequential moment for the U.S. defense sector. That research house noted increased investments in capital expenditure and internal research and development among defense firms.
Beyond financial performance, Northrop’s hardware will play a visible role in NASA’s Artemis II mission. The company’s twin five-segment solid rocket boosters are slated to power the agency’s first crewed mission beyond the Moon since the Apollo program. The mission, scheduled to launch as early as February 2026, will carry four astronauts on a 10-day lunar flyaround as part of the Artemis II program.
Investors and market observers now have competing signals to weigh: a higher price target from a major investment bank and a trimmed near-term earnings outlook, alongside recent upside in quarterly results and a marquee NASA program that highlights the company’s technical footprint. The mix of valuation, operational execution, and program visibility will likely factor into how market participants assess Northrop’s trajectory in the months ahead.
Key takeaways:
- BofA Securities raised its NOC price target to $750 and kept a Buy rating.
- The firm lowered adjusted EPS estimates due to weakness in Mission Systems and share count effects.
- Northrop exceeded Q4 2025 earnings and revenue expectations and is supplying boosters for NASA’s Artemis II mission.
Sectors impacted: Defense, Aerospace, Government contracting