Down 14% in a month, will Northrop Grumman stock recover?


Northrop Grumman stock (NYSE: NOC) is down 14% in a month, while up 13% over the past 12 months, outperforming broader markets, with the S&P500 index down 13%. One of the Wall Street research firms downgraded defense stocks amid concerns about possible lower government defense spending and margin concerns weighing on NOC stocks.

Northrop Grummans
The revenue growth of recent years can be attributed to the aerospace segment, which benefited from higher sales of strategic missiles. In particular, the company’s order book has nearly doubled in recent years, from $42 billion in 2017 to $80 billion today, driven by growing demand for aerospace systems. However, Defense Systems segment revenue has declined in recent quarters, and any reduction in defense spending is likely to weigh on the company’s near-term revenue growth.

With NOC stock down 14% in a month, will it continue its downward trajectory or is an upside just around the corner? Judging by historical performance, there is a higher probability of an increase in NOC stock during the following month. A move of -14% in a month has occurred 18 times in the last ten years. Of those 18 instances, 12 resulted in an increase in NOC shares over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 12 out of 18, or approximately a 67% chance of an increase in NOC stock during the following month. See our analysis of Northrop Grumman’s Stock Chance of Rise for more details.

Northrop Grumman Return (recent) peer comparison

  • 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 over the next twenty-one days, it’s helpful to see how Peers of Northrop Grumman rate on metrics that matter. Other valuable comparisons for companies in different industries can be found at Peer comparisons.

In addition, the Covid-19 crisis has led to many price discontinuities, which can provide attractive trading opportunities. For example, you’ll be surprised how counterintuitive stock valuation is Maritime Products vs. Amerco.

Despite higher inflation and rate hikes by the Fed, Northrop Grumman is up 13% over the past 12 months. But can it fall from here? See how low Northrop Grumman stock can go by comparing the drop from previous market crashes. Here’s a performance summary of all stocks in previous market crashes.

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

Invest Trefis Portfolios that beat the market

See everything Trefis Price estimates