Northrop Grumman (NOC) remains well-positioned across strategic programs and its broader weapons and missile defense portfolios, despite the uncertainty over free cash flow in 2027 and 2028 weighing on the stock, RBC Capital Markets said in a note Wednesday.
The analysts noted that the commentary on the B-21 and Sentinel programs was positive. The Sentinel program is on track for low-double-digit growth this year as it moves towards first flight in 2027, the brokerage highlighted.
RBC added that Northrop has pulled back its earlier 2027-2028 FCF guide, as it sees an incremental $2.5 billion in investments to support the B-21 ramp, which weighed on the stock.
Northrop continues to guide to 2026 sales of $43.5 billion to $44 billion and FCF of $3.1 billion to $3.5 billion. RBC revised its revenue estimate slightly to $44.1 billion and maintained its FCF estimate of $3.3 billion.
RBC maintained an outperform rating on Northrop Grumman with a price target of $750.
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