Down 14% In A Month, Will Northrop Grumman Stock Rebound?

NOC: Northrop Grumman logo
Northrop Grumman

Northrop Grumman stock (NYSE: NOC) is down 14% in a month, while it’s up 13% in the last twelve months, outperforming the broader markets, with the S&P500 index down 13%. One of the Wall Street research firms downgraded defense stocks citing concerns over possible reduced government defense spending and concerns over margins, weighing on NOC stock.

Northrop Grumman’s revenue growth over the recent years can be attributed to its space segment, which has benefited from higher strategic missile sales. Notably, the company’s order backlog almost doubled in recent years, from $42 billion in 2017 to $80 billion currently, driven by growing demand for space systems. However, its Defense Systems segment sales have declined in recent quarters, and any cut in defense spending will likely weigh on the company’s near-term top-line growth.

Now that NOC stock has seen a 14% fall in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of an increase in NOC stock over the next month. A move of -14% in a month has occurred 18 times in the past ten years. Of those 18 instances, 12 resulted in NOC stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 12 out of 18, or about a 67% chance of a rise in NOC stock over the next month. See our analysis of Northrop Grumman’s Stock Chance of Rise for more details.

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Northrop Grumman (NOC) Return (Recent) Comparison With Peers

  • Five-Day Return: TDG highest at 4.5%; NOC lowest at -8.0%
  • Ten-Day Return: TDG highest at 8.1%; NOC lowest at -16.5%
  • Twenty-One Day Return: TDG highest at 8.3%; NOC lowest at -14.3%

While NOC may see higher levels in the next twenty-one days, it is helpful to see how Northrop Grumman’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised by how counter-intuitive the stock valuation is for Marine Products vs. Amerco.

Despite higher inflation and the Fed raising interest rates, Northrop Grumman has risen 13% in the last twelve months. But can it drop from here? See how low can Northrop Grumman stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Jan 2023
MTD [1]
YTD [1]
Total [2]
 NOC Return -17% -17% 96%
 S&P 500 Return 4% 4% 78%
 Trefis Multi-Strategy Portfolio 9% 9% 241%

[1] Month-to-date and year-to-date as of 1/18/2023
[2] Cumulative total returns since the end of 2016

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