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Northrop Wins $13B US Defense Contract For Missile Systems
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Northrop Wins $13B US Defense Contract For Missile Systems

Northrop Grumman has been awarded a $13.3 billion defense contract by the US Air Force, according to a statement on the the US Department Of Defense’s (DoD) website.

According to the DoD statement the contract has been awarded to modernize the country’s intercontinental ballistic missile systems and replace the Minuteman III missile system, which has been a key part of the nuclear force for nearly half a century.

Under the terms of the contract, Northrop (NOC) will perform engineering and manufacturing works at Roy, Utah, and multiple other locations across the US. The defense contractor has a February 2029 deadline to deliver the fully-integrated missile systems.

On September 8, Morgan Stanley analyst Kristine Liwag initiated coverage on Northrop with a Buy rating and a price target of $470 (40.5% upside potential). Liwag noted that the DoD believes the US military’s supremacy is no longer guaranteed and therefore, defense spending will tend to increase, thereby benefiting Northrop Grumman. (See NOC stock analysis on TipRanks).

Currently, the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy analyst consensus. With shares down nearly 2.7% year-to-date, the average analyst price target of $397.25 now implies upside potential of 18.7% from current levels.

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