Northrop Grumman (NYSE:NOC) Stock

Northrop Grumman

Northrop Grumman Corp is a diversified company which is aligned in four operating sectors, which also comprise our reportable segments namely Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The aerospace segment designs and builds military aircraft, including the F-35, Global Hawk drones, and the B-21 bomber. Defense systems develops artillery, missile systems, and missile defense technologies. Mission systems focuses on radar, navigation, and communication systems, while space systems manufactures satellites, sensors, and rocket motors.

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The defense sector is on watch after the Trump administration ordered senior officials at the Pentagon and throughout the U.S. military to prepare for sweeping budget cuts. 

Trump Administration Orders Sweeping Pentagon Cuts: Palantir, Lockheed Martin, General Dynamics Among Stocks On Watch

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iShares Dow Jones US Aerospace & Defense Index Fund

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Trump&#39;s cost-cutting initiative under DOGE raises uncertainty for defense sector, causing volatility in ETFs with major holdings in defense giants.

4 ETFs In The Crosshairs As Defense Cuts Loom — Is It Time To Play Offense?

Lockheed Martin Corporation

Global

Defense stocks including Lockheed Martin Corp (NYSE:LMT) RTX Corp (NYSE:RTX) and Northrop Grumman Corp (NYSE:NOC) are trading higher Tuesday following reports the U.S. is considering allowing Europe to purchase American-made arms for Ukraine. 

Lockheed Martin, RTX, Northrop Grumman Shares Are Moving Higher Tuesday: What&#39;s Going On?

Northrop Grumman Corporation Common Stock

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Innovator Growth-100 Power Buffer ETF- October

The Trump administration has ordered senior officials at the Pentagon and throughout the U.S. military to prepare <a href="https://www.benzinga.com/news/25/01/43266467/trumps-executive-orders-make-us-most-lethal-fighting-force-in-the-world-iron-dome-defense-system-get-woke-policies-out-of-military">for sweeping budget cuts.&nbsp;</a>
The Details: According to a Washington Post <a href="https://www.washingtonpost.com/national-security/2025/02/19/trump-pentagon-budget-cuts/">report</a>, Defense Secretary Pete Hegseth, on Tuesday, sent a memo ordering senior officials to develop plans to cut 8% of the defense budget in each of the next five years. 
The order states plans for proposed cuts should be drawn up by Feb. 24 and includes many notable exemptions, including the modernization of nuclear weapons and missile defense, the acquisition of submarines, drones and other munitions.
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"The time for preparation is over — we must act urgently to revive the warrior ethos, rebuild our military, and reestablish deterrence," Hegseth wrote, according to the Washington Post which obtained the memo. 
"Our budget will resource the fighting force we need, cease unnecessary defense spending, reject excessive bureaucracy, and drive actionable reform including progress on the audit," Hegseth wrote.&nbsp;
Stocks To Watch: Shares of companies in the defense sector are on watch as details of any proposed cuts are not immediately clear.&nbsp;
Due to the above-listed exemptions which include submarines, missile defense and other munitions, many of the legacy defense contractors may not be the focus of proposed spending cuts but should still be monitored.&nbsp;
Lockheed Martin Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>), RTX Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>), General Dynamics Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>), and Northrop Grumman Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) dipped following the Washington Post report but recovered quickly. 
However, shares of Palantir Technologies, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PLTR#NASDAQ">PLTR</a>) fell more than 10% following the news. The large drop may have been due to the stock's recent run which produced gains of nearly 250% over the past six months. 
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Image: Shutterstock

The U.S. defense sector is facing fresh uncertainty as the Trump administration sets the foundation for a cost-cutting initiative under the newly established Department of Government Efficiency (DOGE). Despite the <a href="https://www.benzinga.com/news/global/25/02/43787369/us-russian-officials-begin-ukraine-peace-talks-defense-sector-stocks-rise">recent buoyancy</a> in anticipation of peace talks involving the Presidents of the U.S., Russia and Ukraine, stocks of major defense contractors, including Lockheed Martin (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>), RTX Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>), General Dynamics (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>), and Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>), are staring at near-term risks following the possibility of a defense budget cut. 
While the potential impact is still unfolding, <a href="https://www.benzinga.com/etfs">defense-focused ETFs </a>could be in for a bumpy ride.
ETFs with significant holdings in defense giants may see volatility in the wake of potential budget constraints. Some of the key funds to monitor include:
iShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) – Tracks U.S. defense and aerospace companies, including General Dynamics (18.75% exposure) Lockheed Martin (4.98% exposure) and RTX (15.72% exposure). 
SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) – Offers exposure to large and mid-cap defense stocks, with exposure to stocks like Lockheed Martin, General Dynamics and RTX. This ETF offers a more equally weighted approach, which may help balance the losses.
Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) – Holds a diversified mix of defense contractors and related industries. However, Lockheed Martin and RTX hold the top positions, with 7.26% and 7% of the total AUM.
First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>) – A newer entrant with a focus on companies involved in missile and defense technology. Once again, Lockheed Martin, General Dynamics and RTX hold significant percentage of the total assets.
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Why Defense Stocks Are Under Pressure
The DOGE recently kicked off its review at the Pentagon, aiming to curb waste, fraud, and redundancies. In a post on X, DOGE officials confirmed their commitment to "safely save taxpayer dollars and eliminate waste." 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Great kickoff with <a href="https://twitter.com/DeptofDefense?ref_src=twsrc%5Etfw">@DeptofDefense</a>. Looking forward to working together to safely save taxpayer dollars and eliminate waste, fraud and abuse.
&mdash; Department of Government Efficiency (@DOGE) <a href="https://twitter.com/DOGE/status/1890621621448167497?ref_src=twsrc%5Etfw">February 15, 2025</a></blockquote>
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Defense Secretary Pete Hegseth echoed this sentiment, emphasizing the need to streamline operations and optimize spending, as reported by CBS News.
This initiative has raised concerns for major defense contractors, many of whom rely heavily on government contracts. Among the top players at risk are Lockheed Martin which has retreated almost 10% so far this year, RTX , General Dynamics, with a loss of 6.35% year-to-date, and Northrop Grumman, which has lost 6.5% so far this year.
With over $200 billion in annual federal contracts flowing into the sector, any cuts could significantly affect companies that derive nearly half their revenue from government spending, according to a report by Saxo Bank.
While U.S. defense spending may come under pressure, rising geopolitical tensions and commitments from NATO allies to boost their military budgets could create new opportunities for defense firms.
Fine-Tuning Is Key
For investors holding defense-heavy ETFs, now may be a time for caution but not necessarily panic. Watching how DOGE's review unfolds, tracking upcoming federal budgets, following the peace talks among Russia, Ukraine and U.S., and keeping an eye on global defense spending trends will be important. Diversification within ETFs could also help mitigate sector-specific risks.
As budget talks heat up, defense ETFs may experience short-term turbulence, but the longer-term picture will depend on how much of the spending shift is domestic versus international.
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Photo: Shutterstock

General

Shares of defense stocks are trading lower after a Washington Post report stated that the Trump administration ordered the Pentagon to plan for budget cuts.

<a href="https://www.washingtonpost.com/national-security/2025/02/19/trump-pentagon-budget-cuts/" title="https://www.washingtonpost.com/national-security/2025/02/19/trump-pentagon-budget-cuts/">https://www.washingtonpost.com/national-security/2025/02/19/trump-pentagon-budget-cuts/</a>

Macro Economic Events

Economics

'Trump Administration Orders Pentagon To Plan For Sweeping Budget Cuts; Orders Pentagon To Develop Plans For 8% Budget Cut In Each Of The Next 5-Years' - Washington Post

- Citi's 2025 Global Industrial Tech &amp; Mobility Conf.
 &nbsp;

Northrop Grumman CEO Says More Budget Needed For Homeland Defense Mission, Which Has Been Underfunded Until This Point

- Citi's 2025 Global Industrial Tech &amp; Mobility Conf.

Northrop Grumman CEO Says Co Seeing Rise In Demand For Surveillance And Defense Assets From Europe, Indo-Pacific Regions

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Northrop Grumman CEO Says There Are Some Delays In Getting Things On Contract In First Quarter As Co Looks At Administration Transition In The U.S.

Defense stocks including Lockheed Martin Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) RTX Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>) and Northrop Grumman Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) are trading higher Tuesday following reports the U.S. is considering allowing Europe to purchase American-made<a href="https://www.benzinga.com/news/global/24/12/42280373/us-announces-725-million-arms-package-for-ukraine"> arms for Ukraine</a>. 
What Happened: According to a Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-02-16/trump-opens-door-to-europe-buying-us-made-weapons-for-ukraine?embedded-checkout=true">report</a>, U.S. President Donald Trump has said he&#8217;s open to letting Europe buy U.S.-made weapons for Ukraine as his administration aims to bring an end to the ongoing war.
The report indicates that the move would allow Ukraine to use U.S. weapons despite the recent withdrawal of military support for Ukraine. Even if Trump cuts off U.S. aid, Ukraine may still be able to access American weapons. 
Defense stocks faced selling pressure last week after Trump suggested that the U.S. could cut defense spending by as much as 50%, per <a href="https://www.cnbc.com/2025/02/13/defense-stocks-drop-after-trump-says-defense-spending-could-be-halved.html">CNBC</a>.
&#8220;At some point, when things settle down, I'm going to meet with China and I'm going to meet with Russia, in particular those two, and I'm going to say there's no reason for us to be spending almost $1 trillion on the military &#8230; and I'm going to say we can spend this on other things,&#8221; Trump reportedly said.
&#8220;When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let's cut our military budget in half. And we can do that, and I think we'll be able to do that.&#8221;
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Trump went back and forth on military spending during his 2024 campaign and has continued to send mixed signals in the early part of his presidency. The latest comments on U.S.-made weapons for Ukraine appear to be boosting defense names in a headline-driven market Tuesday morning. 
Officials from the U.S. and Russia also reportedly <a href="https://www.benzinga.com/news/global/25/02/43787369/us-russian-officials-begin-ukraine-peace-talks-defense-sector-stocks-rise">held peace talks</a> on Tuesday to kick off discussions aimed at ending the war in Ukraine. Reports indicate that officials from Europe or Ukraine were not present at the meeting. 
LMT, RTX, NOC Price Action: At publication time, Lockheed Martin shares were up 1.72% at $430.46, RTX shares were up 1.58% at $124.34 and Northrop Grumman shares were up 1.26% at $443.87, according to <a href="http://pro.benzinga.com">Benzinga Pro</a>.
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Photo: courtesy of Lockheed Martin.

Lockheed Martin, RTX, Northrop Grumman Shares Are Moving Higher Tuesday: What's Going On?

WIIM

Shares of US defense stocks are trading higher following reports suggesting Trump is open to allowing Europe to purchase American-made arms for Ukraine. It was also reported Taiwan is considering arms purchases from the US.

A high-stakes call between President Donald Trump and Russian President Vladimir Putin sent shockwaves through markets, dragging down oil prices and U.S. defense stocks as investors reacted to Trump's surprise announcement of imminent peace negotiations to end <a href="https://www.benzinga.com/topic/ukraine">the war in Ukraine.</a>
The West Texas Intermediate light crude – as tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) – tumbled by 2.7% by 3:10 p.m. ET in New York, heading for its worst session since late November 2024.
Trump posted Wednesday on Truth Social that he had &#8220;a lengthy and highly productive&#8221; conversation with Putin, with the two leaders discussing &#8220;Ukraine, the Middle East, Energy, Artificial Intelligence, the power of the Dollar, and various other subjects.&#8221;
Trump added that he had directed his top officials, including Secretary of State Marco Rubio, CIA Director John Ratcliffe, National Security Advisor Michael Waltz and Ambassador and Special Envoy Steve Witkoff to lead negotiations.
Putin reportedly responded positively to the discussions and expressed willingness to cooperate. 
This decision follows a high-profile <a href="https://www.benzinga.com/news/global/25/02/43643471/trump-administration-secures-release-of-cannabis-prisoner-marc-fogel-from-14-year-russian-sentence">prisoner exchange</a> between Washington and Moscow. On Tuesday, Russia released American teacher Marc Fogel after three years of detention, while the U.S. freed Russian cybercriminal Alexander Vinnik.
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<h3 class="wp-block-heading">What's Next For Ukraine And NATO?</h3>
The reaction from Kyiv remains cautious. Ukrainian President Volodymyr Zelenskyy also confirmed he had a "meaningful" conversation with Trump following the talks the U.S. President had with Putin.
&#8220;No one wants peace more than Ukraine. Together with the U.S., we are charting our next steps to stop Russian aggression and ensure a lasting, reliable peace,&#8221; Zelenskyy stated. 
The Ukrainian leader highlighted that Ukraine remains committed to defending its sovereignty.
Zelenskyy also met with Secretary of Security Scott Bessent, marking Bessent's first international visit. The two discussed preparing a new document outlining security, economic cooperation and resource partnerships.
Zelenskyy stressed the importance of preventing Moscow and its allies from gaining control over Ukraine and underscored the need for unified action across the free world.
"We expect to make progress by the Munich Security Conference," Zelenskyy said.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">I had a meeting with <a href="https://twitter.com/SecScottBessent?ref_src=twsrc%5Etfw">@SecScottBessent</a>—his first international visit, which was to Ukraine. We value our partnership with the United States, are grateful for the support in defending our independence, and strive to expand our joint capabilities—especially in security. Security… <a href="https://t.co/Px2VQ0Cnv0">pic.twitter.com/Px2VQ0Cnv0</a>
&mdash; Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) <a href="https://twitter.com/ZelenskyyUa/status/1889747140039311417?ref_src=twsrc%5Etfw">February 12, 2025</a></blockquote>
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<h3 class="wp-block-heading">Stock Market Reactions</h3>
Investors viewed the move as a sign of easing geopolitical tensions and a possible decrease in U.S. government spending on defense contractors.
The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>), representing major U.S. energy companies, tumbled by 2.24% on Wednesday, weighed down by lower oil prices. 
Shares of major U.S. defense contractors experienced marginal declines amid expectations of reduced defense spending following the potential de-escalation in Ukraine. 
Lockheed Martin Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) was down by 1.4% to $443.30, Northrop Grumman Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) eased by 0.5% to $471.70 and General Dynamics Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) dropped by 1.86% to $252.21.
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Photo: Shutterstock

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Citigroup analyst Jason Gursky maintains Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) with a Buy and raises the price target from $587 to $591.

Price Target

Analyst Ratings

Citigroup Maintains Buy on Northrop Grumman, Raises Price Target to $591

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Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our <a href="https://www.benzinga.com/analyst-stock-ratings">analyst ratings page</a>.
<ul>
<li>Raymond James analyst Brian Gesuale upgraded the rating for Booz Allen Hamilton Holding Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAH#NYSE">BAH</a>) from Market Perform to Outperform and announced a $150 price target. Booz Allen Hamilton shares closed at $129.00 on Friday. <a href="https://www.benzinga.com/quote/BAH/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>UBS analyst Steven Fisher upgraded Caterpillar Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAT#NYSE">CAT</a>) from Sell to Neutral and raised the price target from $355 to $385. Caterpillar shares closed at $371.44 on Friday. <a href="https://www.benzinga.com/quote/CAT/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Wolfe Research analyst Myles Walton upgraded the rating for Northrop Grumman Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) from Underperform to Peer Perform. Northrop Grumman shares closed at $487.27 on Friday. <a href="https://www.benzinga.com/quote/NOC/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Wedbush analyst Seth Basham upgraded Tempur Sealy International, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TPX#NYSE">TPX</a>) from Neutral to Outperform and boosted the price target from $67 to $80. Tempur Sealy shares closed at $63.14 on Friday. <a href="https://www.benzinga.com/quote/TPX/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Keybanc analyst Justin Patterson upgraded Zillow Group, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ZG#NASDAQ">ZG</a>) from Sector Weight to Overweight and announced a $100 price target. Zillow shares closed at $79.20 on Friday. <a href="https://www.benzinga.com/quote/ZG/analyst-ratings">See how other analysts view this stock.</a></li>
</ul>
Considering buying CAT stock? Here&#8217;s what analysts think: 
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="583" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/02/03111218/image-2-1024x583.png" alt="" class="wp-image-762932" style="width:593px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/02/03111218/image-2-1024x583.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/02/03111218/image-2-300x171.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/02/03111218/image-2-768x437.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/02/03111218/image-2.png 1115w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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Markets

Trading Ideas

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Newly sworn-in Defense Secretary Pete Hegseth earned nearly $6 million over the past two years from his Fox News job, book deals, and speaking engagements, financial disclosures show.
The documents, covering 2023 and 2024, show Hegseth collected $4.6 million as a Fox News host. His transition to the Pentagon&#8217;s top civilian post will bring a pay cut, as the defense secretary position paid $246,000 in 2024.
Hegseth pulled in $765,000 from speaking fees, charging between $10,000 and $25,000 per appearance at conservative organizations, including Turning Point USA, the Heritage Foundation, and the National Rifle Association. Book deals added another $600,500, with his 2024 title &#8220;The War on Warriors&#8221; generating a $348,000 advance.
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The financial records surfaced as Hegseth faced intense scrutiny during his Senate confirmation. Vice President JD Vance <a href="https://www.benzinga.com/news/25/01/43214563/pete-hegseth-confirmed-as-defense-secretary-after-historic-senate-tie-break-by-vp-vance">broke a 50-50 tie Friday night to confirm him</a>, marking a rare split vote for a defense secretary nominee.
Hegseth&#8217;s wife, Jennifer Rauchet, a former Fox News producer, holds stakes in major companies including Amazon (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Apple (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), and defense contractor Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>). The couple&#8217;s assets include Bitcoin holdings worth at least $15,001, a Baltimore rental property, and bank accounts totaling more than $67,000.
Their liabilities include two mortgages—one between $1 million and $5 million on their residence, and another between $100,001 and $250,000 on a rental property.
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At his Saturday swearing-in ceremony, Hegseth outlined his priorities. &#8220;Restore the warrior ethos in everything that we do, rebuild our military and reestablish deterrence.&#8221;
The narrow confirmation came despite opposition from all Senate Democrats and three Republicans—Sens. Mitch McConnell, Susan Collins, and Lisa Murkowski—who questioned his qualifications and personal conduct.&nbsp;
Hegseth faces immediate challenges leading the Pentagon&#8217;s vast bureaucracy amid global conflicts and modernization efforts.&nbsp;
He will also oversee the Pentagon&#8217;s $850 billion budget and 2.1 million service members. His financial ties drew attention during confirmation hearings, where senators pressed him on potential conflicts of interest with defense contractors.
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During his confirmation hearing, members of the Senate Armed Services Committee&nbsp; scrutinized his past statements and earnings, particularly his Fox News commentary on military policies and leadership. &#8220;I want smarter and more capable people around me than me, and you will get that at the department,&#8221; Hegseth told the panel, acknowledging his need to build an experienced team.
According to a report by CNBC, Senate Democratic leader Charles Schumer criticized the appointment after the vote. &#8220;Republicans have entrusted the most powerful military in the world to someone with no experience, terrible judgment and serious flaws of character,&#8221; he said.&nbsp;
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Defense Secretary Pete Hegseth's $6M Earnings Revealed

Wolfe Research analyst Myles Walton upgrades Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) from Underperform to Peer Perform.

Wolfe Research Upgrades Northrop Grumman to Peer Perform

UBS analyst Gavin Parsons maintains Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) with a Buy and lowers the price target from $579 to $558.

UBS Maintains Buy on Northrop Grumman, Lowers Price Target to $558

Truist Securities analyst Michael Ciarmoli reiterated a <a target="_blank" href="https://www.benzinga.com/quote/NOC/analyst-ratings" rel="noreferrer noopener">Buy rating </a>on the shares of Northrop Grumman Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) with a price forecast of $545.
The company reported fourth-quarter sales that were flat year over year at $10.686 billion with an MTM-adjusted&nbsp;<a target="_blank" href="https://www.benzinga.com/25/01/43340144/northrop-grummans-q4-sales-stagnate-space-systems-struggles-but-margins-and-eps-improve" rel="noreferrer noopener">earnings per share of $6.39</a>.
Space Systems (SS) is expected to show improvement throughout 2025, with the restructuring complementing both Aeronautics Systems (AS) and Defense Systems (DS) for the year, said the analyst.
Alongside the guidance released in the earnings report, management provided further details on the factors influencing their 2025 forecast.
Revenues are anticipated to remain roughly unchanged in the first quarter of 2025 as the challenges from NGI and classified programs subside.
By the second half of 2025, SS is projected to return to growth, with margins expected to reach approximately 10% for the year.
Overall, consolidated segment margins should increase throughout the year in line with revenue growth, with management forecasting about a 10-basis-point overall margin expansion for the year.
The restructuring, which involves shifting the sustainment business from DS to AS, is expected to result in margin accretion. This move, along with the focus of DS on strategic weapons, tactical missiles, and command and control systems, will generate synergies between the two segments.
International expansion continues to gain momentum, with no indication of slowing down, per the analyst. NOC reaffirmed its outlook for strong international demand in 2025, forecasting double-digit revenue growth in foreign markets that will surpass domestic growth.
After experiencing margin pressure earlier in 2024 due to business scaling, MS is now projected to see around 50 basis points of margin growth, leading to an estimated margin of approximately 14.5% for 2025.
As the B-21&#8217;s capabilities are validated through ongoing test flights, management mentioned that discussions are underway about potentially increasing the total order volume for the aircraft over the program&#8217;s lifespan.
There were no significant updates on the Sentinel program. Both programs are expected to show steady growth in 2025, although they will still contribute less than 10% of total revenue, per the analyst.
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RBC Capital Markets analyst Ken Herbert reiterated a Sector Perform rating on the shares and lowered the price target from $530 to $500.
Although total revenue slightly fell short of expectations, segment operating margins surpassed forecasts, reaching 11.2% for the company as a whole, said the analyst.
While the limited margin expansion in 2025 may be a challenge for sentiment, the analyst believes NOC is positioned for significant margin growth in 2026.
Although NOC&#8217;s international sales make up only around 12% of total revenue, the strong growth has the potential for extended benefits, potentially offering additional upside in 2026-2027.
The B-21, which represents about 8% of 2025 sales, is expected to maintain strong political backing, though there are concerns about the growth rate of the Sentinel program, per the analyst.
The price forecast is based on a 20.5x multiple on the 2026 FCF estimate of ~$3.45 billion.
Price Action: NOC shares are trading higher by 0.43% at $485.45 at the last check Friday.
Photo by Ground Picture on Shutterstock.

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Northrop Grumman To See Steady Growth In 2025 Despite Challenges, Says Analyst

Wells Fargo analyst Matthew Akers maintains Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) with a Overweight and lowers the price target from $595 to $574.

Wells Fargo Maintains Overweight on Northrop Grumman, Lowers Price Target to $574

Wall Street is struggling to find risk-on momentum, with major indexes stuck near the flatline at midday as investors assess the latest earnings reports from mega-cap tech stocks and weaker-than-expected U.S. economic growth in the<a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43336153/us-economy-grows-below-q4-estimates-as-consumer-spending-hits-7-quarter-high"> final quarter of 2024.</a>
After Tuesday's rally — which followed a selloff triggered by DeepSeek&#8217;s impact earlier in the week — caution has taken hold, signaling the wounds from the downturn are still fresh.
Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>) is among the hardest-hit stocks, plunging more than 6%, which could mark its worst daily decline<a href="https://www.benzinga.com/news/earnings/25/01/43333060/msft-stock-declines-over-4-in-premarket-after-q2-results-ceo-satya-nadella-says-deepseek-has-some-r"> since October 2022</a>.
Despite reporting overall stronger-than-expected earnings, Microsoft&#8217;s cloud segment, Azure, fell short of growth expectations, and the company slightly missed its revenue guidance for the ongoing quarter.
In contrast, Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) climbed 1.7% post-earnings, reaching new all-time highs.
Another major laggard was United Parcel Service Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UPS#NYSE">UPS</a>), which plummeted 15%, potentially heading for its worst single-day drop <a href="https://www.benzinga.com/news/earnings/25/01/43335015/ups-q4-earnings-major-customer-volume-cut-raises-jitters-stock-tanks">since going public in 2002</a>.
UPS Chief Financial Officer Brian Dykes revealed during the earnings call the company reached an agreement in principle with Amazon.com (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) to significantly cut the volume of packages it handles for the e-commerce giant, aiming for a 50% reduction by the second half of 2026.
The U.S. dollar and bond yields remained stable following the Federal Reserve's decision Wednesday to keep interest rates unchanged at 4.25%-4.5%.
Among commodities, precious metals stood out, with gold rising 1.4% to <a href="https://www.benzinga.com/news/econ-s/25/01/43348204/gold-hits-record-high-as-central-banks-ease-stance-5-mining-stocks-rally">new all-time highs </a>and silver climbing 2.4%.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) edged up 1% to around $105,000.
<h3 class="wp-block-heading">Thursday&#8217;s Performance In Major US Indices, ETFs</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>• Russell 2000</td>
<td>2,306.29</td>
<td>1.0%</td>
</tr>
<tr>
<td>• Dow Jones</td>
<td>44,866.30</td>
<td>0.3%</td>
</tr>
<tr>
<td>• S&amp;P 500</td>
<td>6,054.43</td>
<td>0.3%</td>
</tr>
<tr>
<td>• Nasdaq 100</td>
<td>21,420.81</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:50 p.m. ET</figcaption></figure>
According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent012925&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Benzinga Pro</a>&nbsp;data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;inched 0.2% higher to $603.10.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) edged up by 0.2% to $448.22.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust Series&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>)&nbsp;edged 0.1% lower to $521.30.</li>
<li>The&nbsp;iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) rose 1.2% to $228.50.</li>
<li>The&nbsp;Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) outperformed, up 1.7%; the&nbsp;Technology Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>), lagged down 0.4%.</li>
</ul>
<h3 class="wp-block-heading">Thursday&#8217;s Stock Movers</h3>
<ul>
<li>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) rose 4.4% in reaction to quarterly earnings results. </li>
<li>Other stocks reacting to earnings include:
<ul>
<li>ServiceNow Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOW#NYSE">NOW</a>) down 12.6%</li>
<li>International Business Machines Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBM#NYSE">IBM</a>) up 12.3%</li>
<li>Lam Research Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LRCX#NASDAQ">LRCX</a>) up 7.96%</li>
<li>Raymond James Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RJF#NYSE">RJF</a>) down 1.15%</li>
<li>Ameriprise Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMP#NYSE">AMP</a>) down 3.08%</li>
<li>Waste Management Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) up 4.53%</li>
<li>Las Vegas Sands Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LVS#NYSE">LVS</a>) up 10.4%</li>
<li>Lazard Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LAZ#NYSE">LAZ</a>) up 3.58%</li>
<li>Kirby Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KEX#NYSE">KEX</a>) up 7.22%</li>
<li>Flagstar Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FLG#NYSE">FLG</a>) up 16.46%</li>
<li>Caterpillar Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAT#NYSE">CAT</a>) down 4.43%</li>
<li>Northrop Grumman Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) down 2.04%</li>
<li>Dow Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DOW#NYSE">DOW</a>) down 6.09%</li>
<li>Valero Energy Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VLO#NYSE">VLO</a>) down 2.5%, </li>
<li>Cigna Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CI#NYSE">CI</a>) down 8.46%,</li>
</ul>
</li>
<li>Major companies slated to report earnings after the close are Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Visa Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/V#NYSE">V</a>), Intel Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INTC#NASDAQ">INTC</a>), KLA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KLAC#NASDAQ">KLAC</a>), PPG Industries Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPG#NYSE">PPG</a>), ResMed Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RMD#NYSE">RMD</a>), Baker Hughes Co. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BKR#NASDAQ">BKR</a>), Deckers Outdoor Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DECK#NYSE">DECK</a>) and LPL Financial Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LPLA#NASDAQ">LPLA</a>). </li>
</ul>
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Wall Street Remains Flat, Microsoft Eyes Heaviest Drop Since Late 2022, Gold Sets Fresh Records: What's Driving Markets Thursday?

Northrop Grumman Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) reported fourth-quarter sales that were flat year over year at $10.686 billion, <a href="https://www.benzinga.com/pressreleases/25/01/g43331681/northrop-grumman-releases-fourth-quarter-and-full-year-2024-financial-results">missing the consensus of $11.01 billion.</a>
MTM-adjusted earnings per share were $6.39, <a href="https://www.benzinga.com/earnings">beating the consensus of $6.35.</a>
Sales by segments: Aeronautics Systems $3.22 billion (+11% Y/Y), Defense Systems $2.33 billion (+5% Y/Y), Mission Systems $3.144 billion (+3% Y/Y), and Space Systems $2.71 billion (-13% Y/Y).
The decline in Space Systems sales was driven by a $231 million decrease due to restricted space and NGI program wind-downs.
Segment operating income for the quarter was $1.193 billion, recovering from an operating loss of $383 million a year ago. The margin improved to 11.2%, up from (3.6%) a year ago.
Total operating margin expanded to 10.2%, compared to (3.7%) in the fourth quarter of 2023. NOC's fourth-quarter net awards totaled $17.3 billion, and its backlog reached $91.5 billion.
Operating cash flow rose by 6%, and free cash flow grew by 8%, driven by improved working capital. Full-year 2024 operating cash flow increased by 13%, with free cash flow up by 25%, supported by lower tax payments and higher earnings.
"Our financial results and new record backlog reflect the relevance of our products and the importance of our work. Over the last five years our sales have grown 30% organically and our free cash flow expanded 25% in 2024. Our guidance anticipates continued top line growth, margin expansion, and double digit cash flow growth," said Kathy Warden, chair, chief executive officer, and president.
Fiscal 2025 Outlook: Northrop Grumman now expects sales of $42 billion-$42.5 billion versus the consensus of $42.80 billion.
The company sees MTM-adjusted EPS of $27.85 — <a href="https://www.benzinga.com/calendars/guidance">$28.25 versus consensus of $28.05.</a>
It sees Segment operating income of $4.65 billion—$4.800 billion and adjusted free cash flow of $2.85 billion—$3.25 billion for 2025.
For 2025, Aeronautics Systems expects sales in the low $13 billion range, Defense Systems projects sales in the low $8 billion range, Mission Systems anticipates ~$12 billion in sales, and Space Systems forecasts ~$11 billion in sales. Intersegment eliminations are estimated at ~($2.1 billion).
Price Action: NOC shares traded lower by 1.43% at $474.63 at the last check on Thursday.

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