Northrop Grumman Corporation (NOC) $671.59
Northrop Grumman finds itself at a critical juncture, with its stock flashing an extremely oversold RSI yet facing resistance from its 50-day moving average.
52-wk High $774.0
📌 Investment Snapshot
- 💰 NOC trades at $671.59, a 23.09x P/E, slightly above the S&P 500 average.
- 📈 Q4 2025 revenue hit $11.71B with EPS of $9.94, showing solid sequential growth.
- 🔑 The stock’s RSI of 18.2 screams oversold, pointing to a potential bounce from current levels.
- 🎯 Analysts maintain a ‘Buy’ consensus with a $725.72 target, implying 8.06% upside.
Northrop Grumman currently flashes an extremely oversold RSI of 18.2, suggesting an imminent bounce. However, the stock trades below its 50-day SMA, and the consensus price target offers only an 8% upside, falling short of our 25% threshold for a large-cap buy.
| 📍 Entry Zone | $663.35 or below | 🛑 Stop-Loss | $650.00 |
| 📋 Adjust If | NOC reclaims the $705.66 (SMA50) with above-average volume, signaling a shift in short-term momentum. | ||
The Investment Case — Why Now?
In the last 60-90 days, NOC has seen a sharp pullback, shedding 7.3% over the past month despite a robust 16.6% gain over the last three months. This recent weakness has pushed the stock into deeply oversold territory, as evidenced by its RSI of 18.2, a level that historically precedes a rebound.
The primary risk to this thesis remains the lack of significant upside to the consensus price target. With only an 8.06% implied return to the mean target, the risk-reward profile for a high-conviction buy at this moment appears constrained, especially amidst a volatile macro backdrop with VIX at 30.61.
🤔 Given the extreme oversold conditions, does the limited upside to consensus targets justify sitting on the sidelines, or is the technical setup too compelling to ignore?
🏢 Company Overview
| Detail | Value |
|---|---|
| Company | Northrop Grumman Corporation |
| Ticker / Exchange | NOC / NYSE |
| Sector / Industry | Industrials / Aerospace & Defense |
| CEO | Kathy Warden |
| Founded / HQ | 1939 / Falls Church, Virginia |
📈 Price Action & Technicals
Dead Cross
Inside VA
Buy-side sweep at $734.36 on March 11, 2026
NOC’s price action reveals a clear bearish trend in the short term, with the stock trading below its 50-day SMA ($705.66) which now acts as immediate resistance. The 200-day SMA ($600.9) provides a stronger long-term support, currently well below the trading price.
The RSI at 18.2 screams deeply oversold, signaling a potential for a near-term bounce. However, the MACD shows a bearish dead cross, with the MACD line significantly below its signal, while the ADX at 39.0 confirms a strong bearish trend with -DI dominating +DI. This combination suggests that while a bounce is likely, it might be a relief rally within a broader downtrend.
The Anchored VWAP from the May 2025 swing low sits at $592.28, and the Volume Profile’s Point of Control (POC) is at $576.89. The current price is within the Value Area ($550.25-$710.07), suggesting fair value acceptance, but the price is still above these key support levels, indicating potential room to fall if the current support fails.
Volume is running 11% above its 20-day average, indicating heightened activity during this pullback. The price is currently pressing against the lower Bollinger Band ($663.35), a level that often acts as dynamic support. Recent liquidity sweeps include a buy-side sweep at $734.36, which suggests institutional interest at higher levels, but also two prior sell-side sweeps confirming downward pressure.
⚖ Peer P/E Comparison
| Ticker | Company | P/E (TTM) |
|---|---|---|
| NOC | Northrop Grumman | 23.09x |
| LMT | Lockheed Martin | 17.5x |
| RTX | RTX Corporation | 21.0x |
| GD | General Dynamics | 20.5x |
| S&P 500 | Index Average | 21.0x |
💰 Earnings Deep Dive
| Period | Revenue | EPS | YoY |
|---|---|---|---|
| Q4 2025 | $11.71B | $9.94 | |
| Q3 2025 | $10.42B | $7.67 | |
| Q2 2025 | $10.35B | $8.15 | |
| Q1 2025 | $9.47B | $3.32 |
Northrop Grumman generated a robust $3.2 billion in Free Cash Flow in the latest quarter, demonstrating strong operational efficiency. The company also returned capital to shareholders through $0.5 billion in buybacks, signaling confidence in its valuation and commitment to shareholder returns.
🚀 Growth Drivers — What Moves the Stock
- Geopolitical Tensions 🟡 Priced In — Ongoing global instability and increased defense spending by NATO allies and other nations continue to drive demand for advanced defense systems, directly benefiting NOC’s core business segments.
- Next-Gen Programs 🟢 Upside Surprise — NOC’s leadership in critical next-generation programs, such as the B-21 Raider stealth bomber and advanced missile defense systems, positions it for long-term revenue growth and market share expansion.
- Space Systems Expansion 🟢 Upside Surprise — The growing militarization of space and increased government investment in satellite technology and space-based surveillance systems present a significant growth vector for Northrop Grumman’s Space Systems division.
🏦 Smart Money & Institutional Positioning
13F Holdings
| Institution | Shares (K) |
|---|---|
| Vanguard Group Inc | 13,740 |
| State Street Corporation | 13,208 |
| Capital International Investors | 11,477 |
| Blackrock Inc. | 10,380 |
| Morgan Stanley | 3,667 |
| Capital World Investors | 3,434 |
| Geode Capital Management, LLC | 3,149 |
| Franklin Resources, Inc. | 3,125 |
| Wellington Management Group, LLP | 2,800 |
| Bank of America Corporation | 2,737 |
Holdings reflect most recent 13F (45-day lag).
Insider Transactions
| Name | Title | Date | Type | Shares |
|---|---|---|---|---|
| SIMPSON KATHRYN G. | General Counsel | Mar 2, 2026 | Sale | 873 |
| ROEDER ROSHAN S. | Officer | Feb 27, 2026 | Sale | 1,754 |
| ROEDER ROSHAN S. | Officer | Feb 19, 2026 | Sale | 512 |
| SIMPSON KATHRYN G. | General Counsel | Feb 19, 2026 | Sale | 194 |
Short Interest
| Short % Float | Days to Cover |
|---|---|
| 0.0% | 2.5 |
⚠ Key Risk Factors
~$1B+ impact
~$500M impact
~$300M impact
~$200M impact
🤔 With a strong technical confluence score but persistent macro and company-specific risks, how much weight should investors assign to the immediate oversold bounce versus the longer-term fundamental headwinds?
🎯 Guidance & Wall Street View
| High Target | Mean Target | Low Target | Analysts | Consensus |
|---|---|---|---|---|
| $815.0 | $725.72 | $587.22 | 21 | Buy |
| Firm | Rating | Target | Date | Action |
|---|---|---|---|---|
| Jefferies | Hold | Feb 2026 | Maintains | |
| Citigroup | Buy | Jan 2026 | Maintains | |
| RBC Capital | Outperform | Jan 2026 | Maintains | |
| UBS | Buy | Jan 2026 | Maintains | |
| BTIG | Buy | Jan 2026 | Maintains |
The analyst consensus leans towards ‘Buy’, reflecting confidence in Northrop Grumman’s long-term prospects within the defense sector. However, the average target of $725.72 suggests a more modest upside from current levels than typically desired for a high-conviction entry.
📊 Bull vs Bear — Probability-Weighted Scenarios
🐂 Bull Case
- Escalating global conflicts drive sustained, elevated defense spending, boosting NOC’s order book.
- Successful execution of key next-gen programs (e.g., B-21) leads to significant revenue acceleration and margin expansion.
📊 Base Case
Our base case anticipates Northrop Grumman navigating a stable but competitive defense landscape. Continued geopolitical tensions will support demand, but budget constraints and program execution risks temper aggressive growth. We project a fair value around the consensus target, reflecting steady performance.
🐻 Bear Case
- Unexpected defense budget cuts or major program cancellations significantly impact NOC’s revenue and future outlook.
- Persistent supply chain issues and inflationary pressures erode margins, leading to earnings misses and downward revisions.
🎯 Investor Action Plan — By Profile
Stay on the sidelines for a clear reversal. A reclaim of $680 on strong volume could signal a short-term bounce, targeting the $700 level with a tight stop below $660.
Monitor for a confirmed bottom. Consider scaling into a position if NOC stabilizes around the $660-$665 range (lower Bollinger Band) with a clear bullish divergence on the RSI, targeting a return to the SMA50.
If already in position, maintain holdings. The long-term thesis for defense contractors remains intact, but new capital deployment should await a more compelling entry point with greater upside potential.
❓ Investor FAQ — People Also Ask
Q: Why is NOC’s RSI so low, and what does it imply?
NOC’s RSI of 18.2 indicates the stock is extremely oversold, meaning its recent price decline has been rapid and potentially overdone. This often signals that a short-term bounce or reversal is likely, as selling pressure exhausts itself.
Q: What does the Technical Confluence Score of 70/100 mean for NOC?
A score of 70/100 suggests a moderately strong technical setup. It indicates that several key technical indicators, including VWAP, Volume Profile, and Liquidity Sweeps, are aligning to support a potential upward move or at least a stabilization from current levels, despite the bearish ADX trend.
Q: Why is the verdict ‘WAIT’ despite the oversold RSI?
While the RSI screams oversold, the limited upside to the consensus target (8.06% vs. our 25% threshold for large caps) and the price trading below its 50-day SMA prevent a high-conviction ‘Buy’ call. We advise waiting for a clearer reversal signal or a more attractive risk-reward profile.
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📋 Disclaimer
This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a qualified financial professional before making any investment decisions. Past performance is not indicative of future results.
All active positions and their real-time performance are tracked on our Investment Log.
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