Northrop Grumman Corporation
Industrials · Aerospace & Defense
Structural read: NOC sits on three multi-decade DoD programs simultaneously - B-21 Raider (~100 airframes, $203B program), Sentinel ICBM ($141B Nunn-McCurdy breach but reaffirmed essential), and Next-Gen Interceptor for homeland missile defense.
Space Systems is the fastest-growing segment, with Starshield satellite buses for $SPCE-adjacent gov constellations. 1x revenue.
- B-21 in LRIP, first production lots funded; ~100 airframe planned buy provides 15-20yr revenue visibility
- Sentinel reaffirmed post-Nunn-McCurdy - program continues with cost restructuring, not cancellation
- Space Systems growing double-digits on Starshield, NGI, and classified buses
- Golden Dome / homeland missile defense tailwind directly accretes to NGI + Mission Systems radars
- FY26 DoD budget request +3-4%; munitions replenishment (Ukraine, Israel) lifts Defense Systems
- B-21 LRIP unit costs above estimate - NOC took $1.6B EAC charge in 2024; margin reset still digesting
- Sentinel cost overruns mean Congress can claw back scope (silo refurb vs new-build)
- ~85% USG concentration; CR / shutdown risk on quarterly cadence
- Multiple programs share dilutive fixed-price LRIPs (B-21, GBSD) - limited margin upside near-term
- Trading at ~22x fwd P/E vs $LMT ~17x and $GD ~18x - premium already pricing space/B-21 narrative
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