New York, Jan 10, 2026, 05:48 EST — Market closed
- Northrop Grumman stock rose nearly 5% on Friday, extending gains as defense names reacted to shifting U.S. spending signals.
- The company flagged fresh missile-defense and propulsion work while an analyst downgrade highlighted valuation risk.
- Investors’ next checkpoint is Northrop’s Jan. 27 results and any read-through on cash flow and payouts.
Northrop Grumman Corp (NOC) shares ended Friday up 4.7% at $618.82, after swinging between $578.00 and $619.60 on the day. U.S. markets are closed on Saturday.
The jump capped a volatile week for big defense contractors after U.S. President Donald Trump said the 2027 U.S. military budget should be $1.5 trillion, well above the $901 billion Congress approved for 2026. RBC Capital Markets analysts led by Ken Herbert said that could “offset negative investor sentiment” but “there is significant uncertainty” around the final defense budget. (Reuters)
Policy risk is the other half of the trade. Defense contractors have sought legal advice after Trump signed an executive order tying dividends and share buybacks — when firms repurchase their own stock — to weapons delivery schedules, Reuters reported. White House spokeswoman Anna Kelly said “the days of defense contractors prioritizing investor returns over military readiness are over.” (Reuters)
Friday’s broader market tone was supportive. A weaker-than-expected U.S. jobs report did little to change expectations for Federal Reserve rate cuts this year as the S&P 500 closed at a record, Reuters said. (Reuters)
Northrop also had company news in the mix. It announced the first flight of a digitally redesigned intercontinental ballistic missile target vehicle for missile-defense testing, saying the flight “met all performance goals for the missile defense test event,” Air & Space Forces reported. (Air & Space Forces Magazine)
In propulsion, Northrop said it won a $94.3 million U.S. Navy contract to develop and qualify a 21-inch second-stage solid rocket motor for extended-range missile programs. “Being chosen by the U.S. Navy is an honor,” Gordon LoPresti, a senior director at Northrop, said in a company release carried by Seapower. (Seapower)
But Wall Street is also policing the price. Truist Securities downgraded Northrop to “Hold” from “Buy” and cut its price target to $623, pointing to valuation and what it called a premium to prime peers on price-to-free-cash-flow — free cash flow is the cash left after capital spending. (Investing)
After the run, traders are watching the $640.90 area — the stock’s 52-week high — as the next test; the 52-week range is $426.24 to $640.90. A slide back toward Friday’s $578 low would shift focus back to how far Washington’s push-and-pull on spending and payouts can carry the sector. (Nasdaq)
The next clear catalyst is Jan. 27, when Northrop is scheduled to report fourth-quarter results before the open, with analysts looking for earnings per share of about $6.99. Investors will listen for cash-flow guidance and any signals on capital returns, with the rules of the game still in motion. (Tipranks)
