RBC Capital analyst Ken Herbert downgraded Northrop Grumman to Sector Perform from Outperform with a price target of $450, down from $515. The analyst believes the stock will continue to face headline risk associated with the Sentinel program, potential incremental B-21 cost pressure, and limited margin upside in 2024 and potentially into 2025. Northrop remains a “best-in-class defense prime,” but there is a shift in focus from sales outperformance to limited near-term margin and free cash flow upside, the analyst tells investors in a research note.
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