Northrop Grumman (NOC) Stock Forecast & Price Target

Northrop Grumman demonstrated robust growth in its international sales, which increased by 32% year-over-year in the third quarter of 2025, contributing to a year-to-date rise of 20%, particularly driven by the Defense Systems segment that alone saw a 55% growth. The company reported total sales of $10.4 billion in the second quarter of 2025, reflecting a 1% increase compared to the previous year and exceeding analyst expectations. The steady performance across key segments, coupled with a strong book-to-bill ratio of 1.45x at the beginning of the year, positions Northrop Grumman favorably for sustained growth and profitability.

Northrop Grumman's financial outlook appears negative, primarily due to a significant decline in free cash flow, which fell by 42% year-over-year to $637 million, substantially underperforming against market expectations of $1.13 billion. Additionally, while sales growth in the Mission Systems segment was 14%, the Space Systems segment experienced a 12% decrease, indicating challenges within key areas of their operations. Investor sentiment remains cautious as potential defense budget cuts, program cancellations, and increased competition present significant risks to the company's future growth and profitability, particularly affecting the anticipated slowdown in programs such as the B-21 and GBSD.