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Northrop Grumman (NOC) Gains But Lags Market: What You Should Know


In the latest trading session, Northrop Grumman (NOC) closed at $279.27, marking a +1.2% move from the previous day. The stock lagged the S&P 500′s daily gain of 1.47%. Meanwhile, the Dow gained 0.79%, and the Nasdaq, a tech-heavy index, added 2.02%.

Coming into today, shares of the defense contractor had lost 0.92% in the past month. In that same time, the Aerospace sector gained 1.59%, while the S&P 500 gained 1.5%.

Investors will be hoping for strength from NOC as it approaches its next earnings release. In that report, analysts expect NOC to post earnings of $4.60 per share. This would mark year-over-year growth of 9.26%. Meanwhile, our latest consensus estimate is calling for revenue of $8.32 billion, up 23.47% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $18.94 per share and revenue of $34.02 billion. These totals would mark changes of -11.2% and +13.05%, respectively, from last year.

Any recent changes to analyst estimates for NOC should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% lower. NOC currently has a Zacks Rank of #3 (Hold).

Investors should also note NOC’s current valuation metrics, including its Forward P/E ratio of 14.57. This represents a premium compared to its industry’s average Forward P/E of 14.05.

Meanwhile, NOC’s PEG ratio is currently 1.14. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Aerospace – Defense was holding an average PEG ratio of 1.45 at yesterday’s closing price.

The Aerospace – Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 152, putting it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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