Northrop Grumman (NOC) closed at $355.09 in the latest trading session, marking a -0.21% move from the prior day. This move lagged the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.
Prior to today's trading, shares of the defense contractor had lost 4.66% over the past month. This has lagged the Aerospace sector's gain of 1.98% and the S&P 500's gain of 2.25% in that time.
NOC will be looking to display strength as it nears its next earnings release. In that report, analysts expect NOC to post earnings of $4.74 per share. This would mark a year-over-year decline of 27.52%. Our most recent consensus estimate is calling for quarterly revenue of $8.55 billion, up 5.7% from the year-ago period.
NOC's full-year Zacks Consensus Estimates are calling for earnings of $19.63 per share and revenue of $34.01 billion. These results would represent year-over-year changes of -7.97% and +13.01%, respectively.
It is also important to note the recent changes to analyst estimates for NOC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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 0.01% higher. NOC currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that NOC has a Forward P/E ratio of 18.13 right now. This represents a premium compared to its industry's average Forward P/E of 18.01.
Meanwhile, NOC's PEG ratio is currently 1.46. 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. NOC's industry had an average PEG ratio of 2.11 as of yesterday's close.
The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 18, putting it in the top 8% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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