Craig-Hallum analyst Greg Palm has initiated coverage on NN with a Buy rating and announced a price target of $7. The stock is listed on NASDAQ under the ticker NNBR. The rating reflects a positive outlook on the company's performance.

Coverage Details

The initiation of coverage provides a new valuation benchmark for investors. The Buy rating suggests that the stock is expected to outperform the market.

NN, Inc. has successfully entered the Tier 1 contract manufacturing industry for firearm components in the United States, securing a new agreement to mass produce completed firearms products for a leading provider. This strategic market entry is expected to add between $12 million to $15 million in sales, with production beginning in Q3 and ramping up through 2028. The expansion leverages the company's existing in-house capabilities, including high volume titanium machining, laser welding, and advanced surface treatments, to establish a position in the defense sector.

The company's Defense & Electronics business is currently nearly $60 million in sales, with a 5-year goal to reach $100 million. Including these new awards, NN has won 20+ new programs worth more than $30 million to $35 million per year over the last three years. The company also holds an additional pipeline of $75 million in opportunities within this sector and has recently hired a Defense industry specialist to support growth.

Key Capabilities and Certifications

To support this new product category, NN has developed a comprehensive set of technical and compliance credentials. These capabilities enable the company to meet the rigorous standards of the US firearms and defense markets.

Strategic Growth and Market Outlook

The US defense market is currently at record spending levels with a 5-year outlook indicating continued growth. Specific to the firearms sector, the market is expanding due to an increased emphasis on baseline safety. NN is employing a significant portion of its US footprint to serve the defense, electronics, and weapons markets, with 8 plants now ITAR compliant. This infrastructure allows for a broad product offering including machined parts, stamped parts, plated parts, and assemblies.

Harold Bevis, President and Chief Executive Officer of NN, Inc., highlighted the strategic value of the new program. "This is a nice advancement for NN’s sales growth program into new markets," Bevis stated. "It is another direct payoff on the investments we are making to establish premier positions in high-value markets. A tremendous amount of collaborative innovation occurred between the brand owner and NN over the last couple of years on this program."

Bevis noted that the new products are the highest-priced in the company's portfolio, ranging from $200 to $500 per unit. The company plans to combine this new information with recent wins in Data Center and Medical products to adjust 2026 guidance for sales, adjusted EBITDA, and New Wins when it releases Q2 2026 earnings on August 6.