Northrop Grumman (NOC) Stock Forecast & Price Target

Northrop Grumman reported robust financial performance in 2Q25, with total sales reaching $10.4 billion—an increase of 1% year-over-year and 9% sequentially from 1Q25, indicating stable growth in a competitive environment. The company's international sales experienced significant expansion, growing by 32% year-over-year in 3Q25 and 20% year-to-date, driven by strong contract awards and particularly high performance in the Defense Systems segment which saw a 55% increase in international sales year-over-year. The growth in key product lines, including the B-21 bomber and the E-130J TACAMO program, further underscores Northrop Grumman's positive trajectory in meeting global defense needs.

Northrop Grumman has reported a significant decline in free cash flow (FCF), which fell to $637 million, reflecting a 42% year-over-year drop and falling short of market expectations by approximately $500 million. The mixed sentiment surrounding the company's future guidance for 2025 stems from potential defense budget cuts and uncertainties regarding key programs like the B-21 bomber, alongside challenges in driving margin expansion and increased competition from new industry entrants. Furthermore, the company's international book-to-bill ratio has been below 1.0x year-to-date, indicating difficulties in securing new orders, particularly as expectations for growth in the space segment slow down in the coming years.