With a market cap of $69.3 billion, Northrop Grumman Corporation (NOC) is a leading global aerospace and defense technology company that specializes in delivering innovative solutions across a wide range of domains, including air, sea, space, and cyberspace. It offers cutting-edge products and systems in areas such as autonomous systems, cyber, intelligence, surveillance, reconnaissance, and missile defense. 

Companies valued at $10 billion or more are generally considered “large-cap” stocks and Northrop Grumman fits this criterion perfectly. With a diverse portfolio, the Falls Church, Virginia-based company designs and develops advanced aircraft, defense systems, space systems, and mission solutions to support customers worldwide. 

However, the defense contractor pulled back 14.4% from its 52-week high of $555.57, achieved on Oct. 1. Over the past three months, shares of Northrop Grumman have dipped 7.8%, underperforming the Industrial Select Sector SPDR Fund’s (XLI) 8.1% gain during the same timeframe.

Over the longer term, NOC stock is up 1.6% on a YTD basis, lagging behind XLI’s 21.7% return. Moreover, shares of Northrop Grumman have declined marginally over the past 52 weeks, compared to XLI’s 26.1% gain over the same time frame.

Since late July, Northrop Grumman has traded above its 50-day and 200-day moving averages. However, starting in mid-November, the stock dipped below its 50-day moving average. By early December, it also fell below its 200-day moving average.

Despite reporting weaker-than-expected Q3 sales of $10 billion, shares of Northrop Grumman rose 1.4% on Oct. 24 due to its significant earnings beat, with EPS of $7 surpassing expectations. The company also demonstrated strong year-over-year improvements in operating income and segmental growth in key areas like Aeronautics and Mission Systems. Additionally, an increased backlog of $84.8 billion and the raised 2024 earnings guidance to $25.65 per share - $26.05 per share, positively influencing investor sentiment.

In comparison, NOC lagged behind its rival TransDigm Group Incorporated (TDG), which has gained 25.6% over the past 52 weeks and a 23.2% rise on a YTD basis.

Despite the stock’s weak price action over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering the stock, and the mean price target of $567.55 suggests a premium of 19.3% to current levels.