As of June 18, 2025, Northrop Grumman Corp has a Discounted Cash Flow (DCF) derived fair value of $748.43 per share. With the current market price at $503.97, this represents a potential upside of 48.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $606.35 |
| DCF Fair Value (10-year) | $748.43 |
| Potential Upside (5-year) | 20.3% |
| Potential Upside (10-year) | 48.5% |
| Discount Rate (WACC) | 6.6% - 8.5% |
Revenue is projected to grow from $41033 million in 12-2024 to $55404 million by 12-2034, representing a compound annual growth rate of approximately 3.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 41033 | 4% |
| 12-2025 | 38340 | -7% |
| 12-2026 | 39701 | 4% |
| 12-2027 | 40824 | 3% |
| 12-2028 | 43189 | 6% |
| 12-2029 | 46180 | 7% |
| 12-2030 | 47104 | 2% |
| 12-2031 | 48046 | 2% |
| 12-2032 | 51958 | 8% |
| 12-2033 | 54318 | 5% |
| 12-2034 | 55404 | 2% |
Net profit margin is expected to improve from 10% in 12-2024 to 17% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 4174 | 10% |
| 12-2025 | 4444 | 12% |
| 12-2026 | 5122 | 13% |
| 12-2027 | 5790 | 14% |
| 12-2028 | 6669 | 15% |
| 12-2029 | 7700 | 17% |
| 12-2030 | 7854 | 17% |
| 12-2031 | 8011 | 17% |
| 12-2032 | 8663 | 17% |
| 12-2033 | 9056 | 17% |
| 12-2034 | 9238 | 17% |
with a 5-year average of $1562 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 1594 |
| 12-2026 | 1638 |
| 12-2027 | 1686 |
| 12-2028 | 1687 |
| 12-2029 | 1713 |
| 12-2030 | 1786 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 68 |
| Days Inventory | 14 |
| Days Payables | 28 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 5604 | 640 | 1183 | (47) | 3828 |
| 2026 | 8343 | 983 | 1633 | 156 | 5570 |
| 2027 | 9206 | 1112 | 1680 | 140 | 6275 |
| 2028 | 10290 | 1280 | 1777 | 457 | 6776 |
| 2029 | 11590 | 1478 | 1900 | 461 | 7751 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 606.35 | 20.3% |
| 10-Year DCF (Growth) | 748.43 | 48.5% |
| 5-Year DCF (EBITDA) | 773.28 | 53.4% |
| 10-Year DCF (EBITDA) | 891.47 | 76.9% |
Is Northrop Grumman Corp (NOC) a buy or a sell? Northrop Grumman Corp is definitely a buy. Based on our DCF analysis, Northrop Grumman Corp (NOC) appears to be significantly undervalued with upside potential of 48.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $503.97.