TD Cowen analyst Gautam Khanna has maintained a Hold rating on Northrop Grumman (NYSE: NOC) while lowering the price target from $580 to $550. This adjustment reflects a revised valuation outlook for the defense contractor as the firm assesses its near-term market performance.

Rating and Price Target Details

The revised price target of $550 represents a decrease from the previous target of $580. The Hold rating indicates that the analyst expects the stock to perform in line with the market average over the near term.

Northrop Grumman continues to be monitored for its operational performance and market position, which underpin the analyst's assessment.

Northrop Grumman reported second quarter 2026 earnings per share of $7.68, beating analyst estimates by 12.61%. Sales for the quarter reached $10.9 billion, surpassing the consensus estimate of $10.803 billion and rising 5% year-over-year. The company raised its full-year 2026 sales guidance to $44 billion and increased EPS projections by $1.20, supported by a record backlog of $105 billion and a book-to-bill ratio of 1.84.

Financial Performance Summary

The following table details Northrop Grumman's performance against analyst estimates and year-ago figures:

Operational Highlights and Guidance

Sales increased by 5% across all four business segments, though operating margins were impacted by negative estimates-at-completion (EAC) adjustments in the Space and Defense Systems segments. Specifically, the Space segment faced unfavorable adjustments on the GEM 63XL program, while Defense Systems saw higher projected costs on the Stand-in Attack Weapon (SiAW) program. Despite these pressures, the company generated $20 billion in net awards during the quarter.

Looking ahead, Northrop Grumman increased its full-year 2026 sales guidance to a range of $43.75 billion to $44.25 billion, representing over 5% organic growth. The company raised its adjusted EPS guidance to a range of $28.60 to $29.10, an increase of $1.20 at the midpoint. Management affirmed its adjusted free cash flow guidance of $3.1 billion to $3.5 billion. The record backlog and strong bookings provide visibility for accelerated sales growth in the second half of the year.