Geneos Wealth Management Inc. significantly reduced its stake in Northrop Grumman Corporation (NYSE:NOC) by 61.6% during the third quarter of 2023, according to a recent filing with the Securities and Exchange Commission (SEC). The firm now holds 943 shares of the aerospace and defense company after selling 1,511 shares during this period. At the end of the quarter, these holdings were valued at approximately $575,000.
Other institutional investors have also adjusted their positions in Northrop Grumman. For instance, Parvin Asset Management LLC established a new position valued at around $25,000 in the second quarter. Similarly, Twin Peaks Wealth Advisors LLC acquired shares worth approximately $31,000, while NewSquare Capital LLC increased its holdings by 75.0%, totaling 63 shares valued at $31,000.
In terms of insider activity, Director Mark A. Welsh III sold 97 shares on November 24, 2023, at an average price of $564.08, amounting to a total of $54,715.76. Following this transaction, Welsh owned 4,281 shares valued at approximately $2.41 million. Additionally, CEO Kathy J. Warden sold 7,000 shares on January 5, 2024, for $4.2 million, reducing her ownership to 194,602 shares valued at around $116.76 million.
Northrop Grumman’s Financial Performance and Market Position
On the financial front, Northrop Grumman’s stock opened at $619.31 on a recent trading day, with a market capitalization of $88.39 billion. The company reported a price-to-earnings (P/E) ratio of 22.28 and a 12-month high of $640.90, reflecting a strong position in the market.
For the quarter ending October 21, 2023, Northrop Grumman exceeded earnings expectations, reporting an earnings per share (EPS) of $7.67, surpassing the consensus estimate of $6.43 by $1.24. The firm generated revenue of $10.42 billion, slightly below analysts’ expectations of $10.68 billion, but still marking a 4.3% increase year-over-year. The company has provided guidance for fiscal year 2025, anticipating an EPS range of $25.650-$26.050.
Moreover, Northrop Grumman recently declared a quarterly dividend of $2.31, payable to shareholders of record as of December 1, 2023. This dividend reflects an annualized payout of $9.24, resulting in a yield of 1.5%.
Market Trends and Analyst Insights
Recent developments in U.S. defense spending have positively influenced Northrop Grumman’s stock performance. Former President Donald Trump proposed a $1.5 trillion defense budget for 2027, raising expectations for increased government expenditure on defense contracts. Following this announcement, Northrop Grumman secured a $94.3 million contract from the Navy for solid rocket motors, enhancing its revenue prospects.
Analysts have reacted favorably to Northrop Grumman’s recent performance. BNP Paribas upgraded the stock to a “strong-buy” rating, while Morgan Stanley maintained an “overweight” rating with a price target of $714.00. Furthermore, JPMorgan Chase & Co. raised its price target from $575.00 to $640.00, reflecting confidence in the company’s growth trajectory.
While some analysts predict continued growth, uncertainties remain. President Trump has indicated potential curbs on stock buybacks and executive pay for underperforming contractors, which may pose risks for companies like Northrop Grumman. Despite these challenges, the firm’s strategic contracts and positive earnings history suggest a robust outlook.
As Northrop Grumman continues to adapt to market conditions, the actions of institutional investors and insider transactions will likely play a crucial role in shaping its future performance.
