The Zacks Analyst Blog Highlights: Northrop Grumman, Lockheed Martin, Honeywell International, Embraer and General Dynamics

Zacks


For Immediate Release

Chicago, IL – October 16, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Northrop Grumman Corporation (NOC), Lockheed Martin Corporation (LMT), Honeywell International Inc. (HON), Embraer SA (ERJ) and General Dynamics Corporation (GD).

 

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

 

Northrop to Upgrade Bombers

 

Northrop Grumman Corporation (NOC) was awarded a $108 million contract by the U.S. Air Force to upgrade its fleet of B-2 stealth bombers. There are 20 B-2s in the U.S. fleet, with 19 at Whiteman Air Force Base in Missouri and 1 used for flight testing at Edwards Air Force Base in California. The contract covers new software and hardware that increases the processing power of the plane, creating a more advanced communications suite.

While Northrop is the prime contractor for installation, the parts for the upgrade were designed with a number of partners. The upgrade will include a processing unit designed by Lockheed Martin Corporation (LMT) and a disk drive unit developed by Honeywell International Inc. (HON). To support the new processing units, Northrop is also installing a network of fiber-optic cables inside the bomber.

Going forward, Northrop Grumman’s strong balance sheet and cash flows provide substantial financial flexibility and a cushion for improving shareholder value through incremental dividend, ongoing share repurchases and earnings accretive acquisitions. In the second quarter of 2012, the company repurchased 4.9 million shares for approximately $295 million. At the end of the first half of 2012, the company had a low long-term debt-to-capitalization of 26.5%. Total long-term debt was approximately $3.9 billion, with no significant maturities in the near term, along with cash holdings of $3.1 billion.

Falls Church, Virginia-based Northrop Grumman Corporation is one of the largest defense contractors in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense including electronic systems, information technology, aircraft, space technology, and systems integration services. The positive case for Northrop Grumman stems from revenue growth across the board and a broad diversification of programs.

Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program. Also, its product line in high priority categories, such as defense electronics, unmanned aircraft and missile defense, gives Northrop Grumman an edge over competition.

Northrop Grumman’s backlog is expected to see further upside in the near future through unmanned aerial vehicle (:UAV) platforms, including Broad Area Maritime Surveillance (:BAMS), Fire Scout and Navy Unmanned Combat Air System (:UCA).

Going forward, Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program.

However, these are offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, lower backlog, cost over-runs and reductions in Afghanistan and Iraq operations.

Like its peers, Embraer SA (ERJ) and General Dynamics Corporation (GD), the company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

 

 

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Read the analyst report on NOC

Read the analyst report on LMT

Read the analyst report on HON

Read the analyst report on ERJ

Read the analyst report on GD

Zacks Investment Research



More From Zacks.com

Rates

View Comments (0)