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Northrop Grumman (NOC) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Northrop Grumman (NOC) closed at $453.80, marking a -0.5% move from the previous day. This move lagged the S&P 500's daily gain of 0.99%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq lost 0.31%.

Coming into today, shares of the defense contractor had lost 0.55% in the past month. In that same time, the Aerospace sector gained 6.83%, while the S&P 500 gained 7.91%.

Northrop Grumman will be looking to display strength as it nears its next earnings release, which is expected to be July 28, 2022. On that day, Northrop Grumman is projected to report earnings of $6.03 per share, which would represent a year-over-year decline of 6.07%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.12 billion, down 0.37% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.80 per share and revenue of $36.59 billion. These totals would mark changes of -3.24% and +2.6%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Northrop Grumman. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 remained stagnant. Northrop Grumman currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Northrop Grumman has a Forward P/E ratio of 18.39 right now. Its industry sports an average Forward P/E of 17.71, so we one might conclude that Northrop Grumman is trading at a premium comparatively.

Meanwhile, NOC's PEG ratio is currently 3.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Aerospace - Defense was holding an average PEG ratio of 2.03 at yesterday's closing price.

The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 149, putting it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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