The stock market is exiting April on a shaky note. Weighing on sentiment are persistent fears over tariffs and their potential to stall economic growth. Although the market has experienced a few bursts of optimism on strong corporate earnings and hopes of trade war deescalation, several U.S.-listed large-cap stocks have been hit hard. 

In fact, among the hardest-hit in the broader S&P 500 Index ($SPX) is Northrop Grumman (NOC), which nosedived as much as 12.7% on April 22, its steepest single-day drop since the 2008 financial crisis. The defense giant rattled Wall Street with a highly disappointing earnings report for Q1 2025, revealing significant manufacturing cost overruns tied to its B-21 stealth bomber program. Mounting headwinds from tariffs further added to the downfall. 

Yet, interestingly, despite the sharp drop, analysts appear somewhat bullish on this blue-chip defense giant's prospects. Having said that, could this recent dramatic selloff present a rare buying opportunity in disguise? 

About Northrop Grumman Stock

Virginia-based Northrop Grumman (NOC) is a leading global aerospace and defense technology company. Its work spans autonomous systems, cybersecurity, C4ISR (command, control, communications, computers, intelligence, surveillance, and reconnaissance), strike capabilities, and logistics and modernization, supporting global defense and technology efforts.

Valued at roughly $69 billion by market cap, shares of this defense contractor are flat over the past year, while the broader market has advanced 9.5% during the same stretch. Perhaps in a sign of recovery brewing, shares have gained 2.5% over the past five trading sessions .

Northrop Grumman has built a solid reputation for rewarding its investors, backed by 21 consecutive years of dividend increases, a testament to its long-term commitment. At an annualized rate of $8.24 per share, the dividend yields 1.7%.

Northrop Grumman’s Q1 Earnings Snapshot

Northrop Grumman’s fiscal 2025 first-quarter earnings results, published on April 22, delivered a wave of disappointment among investors. Total sales dropped 6.6% year-over-year to $9.5 billion, falling short of Wall Street’s $9.9 billion estimate. The decline was largely tied to Space Systems, where revenue fell due to the winding down of certain programs. However, earnings seem to have taken an even bigger hit. 

Net income came in at just $3.32 per share, nearly halved from $6.32 per share a year earlier and a whopping 47% below analyst expectations. The sharp drop was mainly blamed on a $477 million pre-tax loss tied to soaring production costs on the B-21 bomber within the Aeronautics Systems segment. Even on an adjusted basis, earnings of $6.06 per share still missed the mark. 

Segment performance was a mixed bag. Defense Systems sales edged up 4% annually to $1.8 billion, while Mission Systems rose 6% to $2.8 billion. On the other hand, Aeronautics Systems slid 8% year over year to $2.8 billion, hurt by weaker B-21 and F-35 sustainment volumes. Plus, Space Systems was the biggest drag, plunging 18% to $2.6 billion due to softer demand on classified projects and next-generation missile initiatives. 

To make matters worse, management trimmed its full-year fiscal 2025 outlook, slashing segment operating income guidance to a range of $4.20 billion to $4.35 billion from a prior $4.65 billion to $4.80 billion. While the company reaffirmed its sales forecast to range between $42 billion and $42.5 billion, adjusted EPS guidance took a hit, lowered to a range between $24.95 and $25.35, compared to the previous range of $27.85 to $28.25

What Do Analysts Expect for Northrop Grumman Stock?

Despite investors’ disappointment over the company’s less-than-stellar first quarter performance, Wall Street still seems to be in favor of NOC stock, maintaining a consensus “Moderate Buy” rating overall. 

Of the 20 analysts offering recommendations, 11 advocate a “Strong Buy,” one gives a “Moderate Buy,” and the remaining eight suggest a “Hold.” The average analyst price target of $543.81 represents potential upside of 12%, while the Street-high target of $604 suggests a 25% rally from current levels.