Falls Church, Virginia-based Northrop Grumman Corporation (NOC) operates as an aerospace and defense company, pioneering technology at the edge of every frontier to advance and protect the U.S. and its allies. With a market cap of $68.1 billion, Northrop focuses on solving the toughest problems in space, aeronautics, defense and cyberspace to meet the ever-evolving needs of its customers.

The defense giant has significantly underperformed the broader market over the past year. NOC stock has observed a marginal uptick of 53 bps over the past 52 weeks and 83 bps on a YTD basis, compared to the S&P 500 Index’s ($SPX) 12.5% gains over the past year and 1.3% returns in 2025.

Narrowing the focus, Northrop has also underperformed the industry-focused iShares U.S. Aerospace & Defense ETF’s (ITA) 27.4% rally over the past year and 18.3% surge on a YTD basis.

Northrop Grumman’s stock prices plummeted 12.7% following the release of its disappointing Q1 results on Apr. 22. While the company’s defense systems and mission systems’ revenues observed a mid-single digit growth, its aeronautics systems’ sales dropped 7.6% year-over-year to $2.8 billion and its space systems’ revenues plunged 18.5% year-over-year to $2.6 billion. This led to a 6.6% drop in its overall revenues to $9.5 billion, falling short of the Street’s expectations by 4.7%. Meanwhile, it profitably took an even sharper hit, with its net earnings tanking 49% year-over-year to $481 million. Furthermore, the company reduced its full-year adjusted EPS guidance from the prior range of $27.85 - $28.25 to $24.95 - $25.35, unsettling investor confidence.

On a positive note, the demand for Northrop’s products has remained resilient, with its backlog increasing by a notable 1.5% quarter-on-quarter to $92.8 billion.

As per analysts’ projections, NOC’s adjusted EPS is expected to grow 5.8% year-over-year to $27.58 for fiscal 2025, ending in December. However, the company has a mixed earnings surprise history. While it has surpassed the Street’s bottom-line estimates thrice over the past four quarters, it has missed the expectations on one other occasion.

The stock holds a consensus “Moderate Buy” rating overall. Of the 20 analysts covering the stock, opinions include 11 “Strong Buys,” one “Moderate Buy,” and eight “Holds.”

This configuration is notably more bullish than three months ago, when the stock had a “Strong Sell” rating and only nine “Strong Buy” recommendations.

On Apr. 23, RBC Capital analyst Ken Herbert reiterated an “Outperform” rating on NOC, but reduced the price target from $575 to $550.

As of writing, Northrop’s mean price target of $543.57 represents a notable 14.9% premium to current price levels, while its street-high target of $604 suggests a 27.6% upside potential.