Northrop Grumman Corporation Analysis

[ntrader 10]

Northrop Grumman Corporation provides products, services, and solutions in aerospace, electronics, information systems, and technical services worldwide.

 

Highlights:

The stock closed yesterday’s trading session at $65.69. In the past year, the stock has hit a 52-week low of $56.59 and 52-week high of $71.25. Technical indicators for the stock are bullish. NOC has a market cap of $15.71 billion and is part of the industrial goods sector.

 

GROWTH AND BALANCE SHEET

The company reported earnings of $2.06 per share compared with $1.85 in the fourth quarter of 2011. . Its revenue fell 0.5% to $6.48 billion. However, analysts expected earnings of $1.74 per share on revenue of $6.33 billion. The company expects revenue to be approximately $24 billion in 2013. It expects earnings from continuing operations to be in the range of $6.85 to $7.15 in 2013.

 

VALUATION

NOC PE stands at 8.41 below the industry’s average of 16.27. The stock is currently trading 18% below its intrinsic value of $80.46 this suggests that the stock is undervalued at these levels. NOC's current Price/Sales of 0.62 is below the average of its industry of 0.76. The beta of 1.06 implies higher volatility of the stock with respect to the S&P 500. Northrop Grumman ended 2012 with cash and cash equivalents of approximately $3.9 billion, up from $3 billion at year-end 2011. Long-term debt remained approximately flat year over year at $3.9 billion at the end of Dec 31, 2012. Cash generated from operations in 2012 totaled $2.6 billion versus cash from operations of $2.1 billion in the year-ago period. The firm pays a very nice dividend yield of 3.4% with a 28% payout ratio.

 

My view:

The company has demonstrated bullish technical signs, and has been generating economic value for shareholders for the past few years. NOC stock is -2.80% lower year to date. I am optimistic about the stock price and i will buy the stock and also some March, strike 67.50 calls.

[Larry1234 10]

The analysis seems to be good. But according to you, what is the target price for this stock by march ?

[ntrader 10]

Thank you Larry1234,

I didn't assign a target price for the stock for March. With my analysis i try to evaluate the stock using fundamental and technical analysis. I am using this analysis just to decide if i will go long or short in a stock for the next 6 months. I am looking for a model which can give a trustworthy target price, do you know any, you will help me a lot if can tell me where to find a model for the target price.

[harreymartin 10]

Northrop Grumman Corporation (Northrop) is a global defense and technology company engaged in the manufacture of products and services for aerospace, electronics, information systems, shipbuilding, and technical services for its government and commercial customers across the world. It also manufactures aircraft carriers, submarines, spacecraft systems, mission-critical computer systems, and wireless communications infrastructure. The company operates through its seven segments grouped under four primary businesses namely, Information & Services, Aerospace, Electronics, and Shipbuilding. It mainly operates across the US and the U.K.

 

Northrop Grumman Corporation - Financial and Strategic Analysis Review is an in-depth business, strategic and financial analysis of Northrop Grumman Corporation. The report provides a comprehensive insight into the company, including business structure and operations, executive biographies and key competitors. The hallmark of the report is the detailed strategic analysis of the company. This highlights its strengths and weaknesses and the opportunities and threats it faces going forward.

[ntrader 10]

I believe you can help more in the Northrop Grumman Corporation Analysis if you can make some comments about the financials of the company or you view about the future earnings or provide some technical analysis of the company. Providing just a description of the company it doesn't help us to make an investment decision.

[Gringo 10]

Hello ntrader,

 

I have done some technical analysis in the Wyckoff forum for Northrop Grumman Corporation.

 

From your analysis it seems you have more of a fundamental bent to your analysis and my analysis may not hold much value. If that is the case please disregard my post and forgive the unnecessary interruption.

 

Here's the link: http://www.traderslaboratory.com/forums/wyckoff-forum/15399-auction-market-theory-wyckoff-way-discussion-32.html#post174852

 

 

Gringo

[ntrader 10]

Dear Gringo,

 

I really liked your technical analysis on NOC it was really helpful and gave ne some hints, thank you