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    Northrop Grumman (NOC) Stock Could Still Be A Bargain Despite Its 34% Run

    Simply Wall St·10/15/2026 02:35:30
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    Northrop Grumman shares closed at US$495.69, and after a mixed run in recent years the real question now is whether that price lines up with the cash the business is expected to generate. With fresh program news on the table, the stock invites a closer look at what its current market value implies for future cash flows rather than just the share chart.

    • Over the past 5 years the stock has returned 34.1%, which puts real weight on whether the underlying cash generation can support the value that has built up over that period.
    • The first fully autonomous flight of the YFQ-48A Talon Blue, along with progress on systems like Raid Hunter and the FORTITUDE chip, can influence how investors think about future contract opportunities, capital spending needs and ultimately the timing and durability of Northrop Grumman's cash flows.
    • What if you looked at Northrop Grumman through its earnings instead? See what Northrop Grumman's 15.7x P/E says about the price.

    The issue now is whether Northrop Grumman's current share price is reasonable when you line it up against the cash flows implied by a Discounted Cash Flow (DCF) estimate.

    For a wider watchlist of companies where the story also starts with cash generation rather than headlines, a focused stock screen built around 32 high quality undervalued stocks can be a useful next step.

    Does Northrop Grumman Look Undervalued on Cash Flow?

    The Discounted Cash Flow (DCF) model here projects what Northrop Grumman might return to shareholders in cash over time and then discounts that back to today. On this view, the business is being valued on a path where last twelve month free cash flow of about $3.4b is expected to continue growing, with analysts and internal estimates pointing to higher annual cash generation into the early 2030s. When those future streams are discounted back, the output of the model comes in meaningfully above the current share price of US$495.69.

    That gap exists because the projections assume Northrop Grumman can sustain and gradually build on its current cash engine rather than relying on a one off spike. The first autonomous flight of YFQ-48A Talon Blue fits that story, because it anchors potential new program work that is not yet fully reflected in reported free cash flow but is partially captured in the forward estimates underpinning this DCF output. Find out what Northrop Grumman could be worth using our Discounted Cash Flow (DCF) estimate.

    The Northrop Grumman Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives take the valuation puzzle for Northrop Grumman and turn it into clear, testable storylines about what would need to happen to growth, profitability and earnings for the shares to be worth materially more or less than today, and they sit on the platform's Community page. Rather than relying on a single model output, each one lays out the assumptions behind its fair value so you can compare them with future results as they are reported.

    One of the top community narratives on Northrop Grumman: 20% undervalued

    "The main requirement for this narrative is continued execution on high visibility programs and capacity buildouts, including B-21, Sentinel, munitions and solid rocket motors..."

    Discover why this Narrative puts Northrop Grumman at 20% undervalued.

    An unresolved risk question for Northrop Grumman

    The valuation work only tells part of the story, because separate checks on Northrop Grumman have surfaced specific concerns that may matter just as much as the cash flow math. Take a closer look at 1 warning sign before settling on a valuation.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.