The Best Defense Is a Moat: Upgrading Northrop's and Raytheon's Moats to Wide
We're upgrading our moat ratings for Raytheon and Northrop Grumman to wide from narrow. As a result, our fair value estimates have increased to $209 from $199 for Raytheon and to $318 from $307 for Northrop. Despite both companies' competitive advantages, neither stock is undervalued, in our view.We had previously thought that pricing pressures were on the horizon in the U.S. defense sector, which constrained our moat ratings for Northrop and Raytheon to narrow. However, these pressures haven't...
Northrop Grumman is a security company. The company's segments include: Aerospace Systems, which is engaged in the design, development, integration and production of manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems; Innovation Systems, which is engaged in the design, development, integration and production of flight, armament and space systems; Mission Systems, which is engaged in end-to-end mission solutions and multifunction systems; and Technology Services, which is engaged in delivering solutions and services in support of mission-critical networks and systems.
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