Northrop Grumman Graded D as Navy Fighter Award Goes to Boeing

• Our read: EasyAlpha grades Northrop Grumman Corporation D against its S&P 500 industry peers. While efficiency remains a solid foundation, lagging price trend keeps the grade low despite 56.5% of analysts rating the shares a buy.
• The day: The stock closed -0.2% at $504.61 on Tuesday, September 29 after the Pentagon awarded the Navy next-generation fighter jet contract to Boeing.
• Watching: Third-quarter financial results are scheduled for release on Tuesday, October 20.

The Pentagon announced that Boeing won the contract to build the next-generation F/A-XX fighter jet for the U.S. Navy, selecting Boeing over Northrop Grumman Corporation. The development program to replace the F/A-18 fleet is valued at $20 billion for test aircraft. Even with the lost bid, trading in Northrop Grumman Corporation remained quiet on Tuesday, September 29, with the shares slipping 0.2% to finish at $504.61. Separately, the company secured an $18.8 million U.S. Army award to advance counter-drone missile systems.

Northrop Grumman is currently building the B-21 stealth bomber and the Sentinel intercontinental ballistic missile system. Those ongoing defense programs already leave the contractor with "very full plates" across its major manufacturing lines.

Although the session's move was small, it extends a prolonged slump for the shares. The stock is -7.5% over the past month and -11.5% so far this year. At $504.61, the shares trade 5.8% above their 52-week low of $476.85.

EasyAlpha grades Northrop Grumman Corporation D against its S&P 500 industry peers. Historically, companies graded A or B have stronger fundamentals and carry a lower risk of large drawdowns than companies graded D or E. For Northrop Grumman Corporation, the primary drag on the grade is its price trend, which captures the persistent downward momentum over recent months.

The low grade contrasts with the company's operating performance, where efficiency represents its highest-scoring dimension. Northrop Grumman generates a profit margin of 10.5% and a return on equity of 27.0%.

That financial foundation supports a clear divergence between the quantitative grade and Wall Street expectations. Among analysts covering the stock, 56.5% maintain buy recommendations, with an average price target of $644.45. Bridging the gap between the subdued share price and those targets will require smooth execution on existing defense programs, with the next progress report scheduled for earnings on Tuesday, October 20.