On July 21, Northrop Grumman fell 5.75% in regular trading, trading at $484.21/share, with turnover of approximately $100 million. The decline was triggered by a combination of adjusted earnings missing consensus and a significant analyst price target cut.
The company reported Q2 adjusted EPS of $6.77, missing the analyst consensus estimate of $6.82 by 0.73%, representing a 4.78% year-over-year decrease from $7.11. While GAAP EPS of $7.68 exceeded FactSet's estimate of $6.84, and sales of $10.876 billion beat the $10.803 billion estimate, the adjusted earnings shortfall weighed on sentiment. The company guided full-year sales of $43.75B-$44.25B, in line with the $44.00B consensus.
On the same day, RBC Capital Markets cut its price target from $750 to $640, a 14.7% reduction, while maintaining its Outperform rating. This follows a series of target price reductions from major institutions in recent months, including Wells Fargo cutting to $620 from $800 and Goldman Sachs lowering to $533 from $603. Peer Lockheed Martin also declined 3.46%, reflecting broad defense sector pressure.
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