Jefferies Trims Northrop Grumman (NOC) Target on Growth and Margin Concerns

Northrop Grumman Corporation (NYSE:NOC) is included among the 10 Best June Dividend Stocks to Buy.

Jefferies Trims Northrop Grumman (NOC) Target on Growth and Margin Concerns

On May 26, Jefferies lowered its price recommendation on Northrop Grumman Corporation (NYSE:NOC) to $620 from $660. It reiterated a Hold rating on the shares after meeting with CEO Kathy Warden and CFO John Greene. The firm said it applied a discount because of Northrop’s below-average organic growth, margin pressure tied to the B-21 program, and rising capital expenditures. According to the analyst, capex has been increasing at a 14% compound annual growth rate and is now approaching 4.5% of sales.

On May 18, Citi analyst John Godyn lowered the firm’s price goal on NOC to $628 from $742. He kept a Buy rating on the shares. The firm updated its models in the aerospace and defense sector and said it does not expect an “immediate V-shaped rally” without a resolution to the Middle East conflict. Citi still sees buying opportunities after the recent selloff. The firm expects the aerospace group to recover first, followed by defense companies.

Northrop Grumman Corporation (NYSE:NOC) is a global aerospace and defense technology company. Its business segments include Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems.

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