On Tuesday, Wells Fargo (NYSE:WFC) maintained its Equal Weight rating on Northrop Grumman (NYSE:NOC) and increased the price target to $518 from $483. The adjustment follows Northrop Grumman's first-quarter performance, which exceeded expectations. The analyst noted that there were no changes to the B-21/Sentinel program, considering this steadiness a positive sign.
The firm has adjusted its earnings per share (EPS) estimates for Northrop Grumman, citing the company's robust first-quarter results. The 2024 EPS forecast has been raised to $24.78, up from $24.73. However, the 2025 EPS projection has been lowered to $27.25 from $27.73, factoring in a more conservative outlook for margin improvements.
The new price target of $518 is based on a 19 times multiple applied to the firm's 2025 EPS estimate. This multiple is in line with Northrop Grumman's current trading multiples based on the 2024 EPS estimates. The analyst's commentary suggests a recognition of the company's recent performance while also incorporating a cautious approach to future margin growth.
InvestingPro Insights
As Northrop Grumman (NYSE:NOC) continues to impress with its first-quarter performance, InvestingPro data provides additional insights into the company's financial health and market position. With a market capitalization of $71.59 billion, Northrop Grumman trades at a P/E ratio of 33.77 and a slightly higher adjusted P/E ratio for the last twelve months as of Q1 2024 at 34.56. The company has demonstrated solid revenue growth of 8.13% over the last twelve months, reflecting its strong market presence and operational efficiency.
InvestingPro Tips highlight that Northrop Grumman has raised its dividend for 20 consecutive years, showcasing a commitment to returning value to shareholders. Additionally, the company's stock is known for low price volatility, which might appeal to investors seeking stability in their portfolio. With 7 analysts having revised their earnings upwards for the upcoming period, there's a positive sentiment around Northrop Grumman's future financial performance. For those interested in gaining more insights, there are additional tips available on InvestingPro, and users can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It's also noteworthy that Northrop Grumman is trading near its 52-week high, at 97.73% of this peak value, indicating a strong market confidence in the company's stock. This aligns with the analyst's increased price target and Wells Fargo's maintained Equal Weight rating. The company's next earnings date is set for July 25, 2024, which will be a key event for investors to watch.
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