NOC - Embedded Expectations Analysis - 2019 04 08
Northrop Grumman Corporation (NOC:USA) currently trades near the low end of recent averages relative to UAFRS-based (Uniform) Earnings, with a 17.9x Uniform P/E, implying bearish expectations for the firm, and management may be concerned about Aerospace and Mission Systems organic sales growth, their Innovation Systems integration, and defense capabilities.Specifically, management may lack confidence in their ability to sustain F-35 sales, technology service business performance, and Aerospace Systems and Mission Systems organic sales growth. Additionally, they may be concerned about the integration of Innovation Systems, capex from the GBSD win, and their ability to support missions in the National Security and Defense Strategy. Moreover, they may be exaggerating their missile defense capabilities, SABR radar system deliveries, and their ability to sustain profitable growth in legacy sectors.
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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