Is Northrop Grumman (NOC) Undervalued Following Its New Navy Radar Contract?

Northrop Grumman (NOC) just secured a US$123.8 million U.S. Navy contract to supply 67 APG-85 radars for the F-35 program, extending production visibility on this sensor line through February 2031.

Recent trading tells a more muted story than the new radar award suggests. Northrop Grumman’s share price is down 6.18% over the past month and 13.09% year to date, while a 53.27% five year total shareholder return shows the longer record has been materially more positive than the near term momentum.

Capitalize on the radar and defense theme by scanning a curated list of 93 robotics and automation stocks that could also benefit from long-cycle military and automation spending.

Northrop Grumman now trades well below the average analyst target and sits at a similar discount to some intrinsic value estimates. After the recent share price slide, where does a fair entry point really land?

Most Popular Narrative: 21% Undervalued

Northrop Grumman’s most followed valuation storyline pegs fair value at $646.41 per share, well above the last close at $508.98. This frames the recent pullback as a potential discount rather than a shift in fundamentals.

The current valuation, set against raised 2026 sales and EPS guidance, reaffirmed free cash flow targets, and the scale of funded backlog and multi year missile agreements, is described in this narrative as not fully reflecting these earnings and cash flow opportunities. Within this view, the stock is characterized as undervalued and sentiment as bullish.

See why 104 investors see Northrop Grumman as 21% undervalued.

Result: Fair Value of $646.41 (UNDERVALUED)

Still, the bullish Northrop Grumman storyline depends on clean execution on complex fixed price programs and on heavy capital spending turning into genuinely profitable work.

Find out about the key risks to this Northrop Grumman narrative.

Next Steps

If the mixed tone on Northrop Grumman has you torn, consider acting quickly, reviewing the full set of risks and positives, and weighing the 4 key rewards and 1 important warning sign.

Looking for more Northrop Grumman style investment ideas?

You do not need to stop at Northrop Grumman. Use the Simply Wall St screener to surface fresh ideas that fit the way you like to invest.

• Target dependable income by reviewing a curated set of higher yielding opportunities through the 8 dividend fortresses.
• Hunt for quality at a discount by scanning the 30 high quality undervalued stocks that combine stronger fundamentals with more appealing pricing.
• Prioritize resilience over drama by focusing on the 30 resilient stocks with low risk scores that score well on financial strength and measured volatility.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com