Northrop Grumman Corp

NOC

Search, Detection, Navigation, Guidance, Aeronautical Sys

Mkt Cap

$67.82B

PE

31.43

Debt

$16.32B

Cash

$3.061B

EV

$81.09B

FCF

$2.135B

Market Cap

$67.82B

P/E Ratio

31.43

Debt

$16.32B

Cash

$3.061B

EV

$81.09B

FCF

$2.135B

Charts data: {"Earnings":[{"time":"2014-12-30","value":2069000000},{"time":"2015-12-30","value":1990000000},{"time":"2016-12-30","value":2200000000},{"time":"2017-12-30","value":2015000000},{"time":"2018-12-30","value":3229000000},{"time":"2019-12-30","value":2248000000},{"time":"2020-12-30","value":3189000000},{"time":"2021-12-30","value":7005000000},{"time":"2022-12-30","value":4896000000},{"time":"2023-12-30","value":2056000000}],"Sales":[{"time":"2014-12-30","value":23979000000},{"time":"2015-12-30","value":23526000000},{"time":"2016-12-30","value":24706000000},{"time":"2017-12-30","value":26004000000},{"time":"2018-12-30","value":30095000000},{"time":"2019-12-30","value":33841000000},{"time":"2020-12-30","value":36799000000},{"time":"2021-12-30","value":35667000000},{"time":"2022-12-30","value":36602000000},{"time":"2023-12-30","value":39290000000}],"Net Margins":[{"time":"2014-12-30","value":0.08628383168605863},{"time":"2015-12-30","value":0.08458726515344725},{"time":"2016-12-30","value":0.08904719501335707},{"time":"2017-12-30","value":0.07748807875711429},{"time":"2018-12-30","value":0.107293570360525},{"time":"2019-12-30","value":0.06642829703613959},{"time":"2020-12-30","value":0.086659963585967},{"time":"2021-12-30","value":0.1964000336445454},{"time":"2022-12-30","value":0.13376318233976286},{"time":"2023-12-30","value":0.05232883685416136}],"Assets":[{"time":"2014-12-30","value":26572000000},{"time":"2015-12-30","value":24454000000},{"time":"2016-12-30","value":25614000000},{"time":"2017-12-30","value":34917000000},{"time":"2018-12-30","value":37653000000},{"time":"2019-12-30","value":41089000000},{"time":"2020-12-30","value":44469000000},{"time":"2021-12-30","value":42579000000},{"time":"2022-12-30","value":43755000000},{"time":"2023-12-30","value":46544000000}],"Stockholders Equity":[{"time":"2014-12-30","value":7235000000},{"time":"2015-12-30","value":5522000000},{"time":"2016-12-30","value":5259000000},{"time":"2017-12-30","value":7048000000},{"time":"2018-12-30","value":8187000000},{"time":"2019-12-30","value":8819000000},{"time":"2020-12-30","value":10579000000},{"time":"2021-12-30","value":12926000000},{"time":"2022-12-30","value":15312000000},{"time":"2023-12-30","value":14795000000}],"ROE":[{"time":"2014-12-30","value":0.28597097442985486},{"time":"2015-12-30","value":0.360376675117711},{"time":"2016-12-30","value":0.4183304810800532},{"time":"2017-12-30","value":0.2858967082860386},{"time":"2018-12-30","value":0.39440576523757176},{"time":"2019-12-30","value":0.2549041841478626},{"time":"2020-12-30","value":0.30144626146138576},{"time":"2021-12-30","value":0.5419309917994739},{"time":"2022-12-30","value":0.31974921630094044},{"time":"2023-12-30","value":0.13896586684690773}],"ROA":[{"time":"2014-12-30","value":0.12027698329068193},{"time":"2015-12-30","value":0.1257871922793817},{"time":"2016-12-30","value":0.12465838994299992},{"time":"2017-12-30","value":0.09448119827018357},{"time":"2018-12-30","value":0.1003904071388734},{"time":"2019-12-30","value":0.09659519579449488},{"time":"2020-12-30","value":0.09141199487283276},{"time":"2021-12-30","value":0.2099156861363583},{"time":"2022-12-30","value":0.13337904239515483},{"time":"2023-12-30","value":0.05450756273633551}]}

Northrop Grumman Corporation operates as an aerospace and defense company worldwide. The company's Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems in the United States and internationally. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, and produces weapons and mission systems. It offers products and services, such as integrated battle management systems, weapons systems and aircraft, and mission systems. This segment also provides command and control and weapons systems, including munitions and missiles; precision strike weapons; propulsion, such as air-breathing and hypersonic systems; gun systems and precision munitions; life cycle service and support for software, weapons systems, and aircraft; and logistics support, sustainment, operation, and modernization for air, sea, and ground systems. The company's Mission Systems segment offers cyber, command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. This segment also provides airborne multifunction sensors; maritime/land systems and sensors; navigation, targeting, and survivability solutions; and networked information solutions. Its Space Systems segment offers satellites and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. The company was founded in 1939 and is based in Falls Church, Virginia.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Northrop Grumman Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$2.135B	$2.117B	$2.099B	$2.081B	$2.063B	$2.045B	$2.027B	$2.01B	$1.993B	$1.976B	$1.959B	$19.59B
DCF		$1.841B	$1.587B	$1.368B	$1.179B	$1.017B	$876.5M	$755.7M	$651.5M	$561.6M	$484.2M	$4.842B
Value	$15.16B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 11%

Earnings Stability 47%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	8.5%	8.9%	7.7%	11%	6.6%	8.7%	20%	13%	5.2%	5.4%
ROA	13%	12%	9.4%	10%	9.7%	9.1%	21%	13%	5.5%	5.6%
ROE	36%	42%	29%	39%	25%	30%	54%	32%	14%	15%

What is the average Net Margin?

The average Net Margin over the past 5 years is +10.71%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.11%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +11.44%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is 0%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +32.52%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -2.41%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	3.92	3.76	9.62	5.82	4.96	5.49	5.98	9.56	6.67	7.65
Debt Equity	1.20	1.35	2.30	1.83	1.71	1.50	1.00	0.92	0.95	1.15
MIN
Graham Stability	-	-	97%	100%	91%	100%	100%	100%	41%	41%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 7.65.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.53.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.41.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	6.9%	5.5%	2.2%	7.3%	0.1%
Net Income	-0.96%	-8.6%	-14%	-58%	-1.7%
Stockholders Equity	16%	13%	12%	-3.4%	2.2%
FCF	1.5%	-4%	-10%	43%	0.37%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.48%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.1%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -8.63%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.68%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +12.56%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +2.18%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -4.02%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +0.37%.