Northrop Grumman Corporation (NOC) DCF Valuation
TGM's two-stage DCF values Northrop Grumman Corporation (NOC) between $165.91 and $380.41 depending on assumptions, with a base case of $238.50. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$500.03 is justified only if free cash flow grows about +15.8% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $165.91 |
| Base case | 2.0%/yr | 7.5% | $238.50 |
| Optimistic | 5.0%/yr | 6.5% | $380.41 |
| Analyst DCF (FMP) | independent reference — different model | $1,098.53 | |
Current Price
$500.03
Market-Implied Growth
+15.8%/yr
vs -3.1% 5Y actual
Model Scenario Range
$165.91 – $380.41
model output — not a price target
NOC DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for NOC (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.4B · 0.14B shares · net debt $13.5B
Estimated Fair Value
$232.51
-53.5% vs $500.03
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $500.03; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $345 | $389 | $449 | $532 | $658 |
| 6.5% | $256 | $282 | $314 | $355 | $410 |
| 7.5% | $197 | $213 | $233 | $256 | $285 |
| 8.5% | $155 | $166 | $178 | $193 | $211 |
| 9.5% | $124 | $131 | $140 | $149 | $161 |
About Northrop Grumman Corporation
Northrop Grumman Corporation is a leading global player in the aerospace and defense sectors. Its Aeronautics Systems division is responsible for the full lifecycle of aircraft, from design and development to production, integration, and ongoing maintenance. This includes a diverse portfolio of crewed and uncrewed aerial platforms: advanced strategic long-range strike aircraft, tactical fighter and air superiority jets, and sophisticated airborne systems for battle management and command and control. Additionally, it specializes in autonomous uncrewed aircraft systems, such as high-altitude, long-endurance strategic intelligence, surveillance, and reconnaissance (ISR) platforms, alongside vertical take-off and landing tactical ISR systems. The Defense Systems segment focuses on creating and delivering a wide array of weapons and mission technologies. Its offerings encompass integrated battle management solutions, various weapons platforms, and specialized aircraft. Key products include command and control systems, munitions, and missiles, alongside precision strike capabilities. The segment is also at the forefront of propulsion technologies, offering both air-breathing and advanced hypersonic systems, as well as sophisticated gun systems and precision munitions. Beyond products, it provides comprehensive life-cycle support, including software services, ongoing maintenance, logistics, operational assistance, and modernization efforts for air, sea, and ground-based defense systems. Within its Mission Systems division, Northrop Grumman delivers critical capabilities spanning cybersecurity, C4ISR (command, control, communications, computers, intelligence, surveillance, and reconnaissance). This includes developing advanced sensing technologies such as radar, electro-optical/infrared, and acoustic sensors, alongside electronic warfare systems. The division also provides cutting-edge communications and networking solutions, intelligence processing, navigation systems, and maritime power, propulsion, and payload launch systems. Furthermore, it supplies airborne multifunction sensors, integrated maritime and land-based systems, targeting and survivability solutions, and robust networked information platforms. The Space Systems segment is a key provider of space-based solutions, delivering satellites and their associated payloads, along with essential ground control systems. It specializes in missile defense systems, including interceptors, and offers a range of launch vehicles with their propulsion components, as well as strategic missile technologies. Established in 1939, the corporation maintains its headquarters in Falls Church, Virginia.
- Sector
- Industrials
- Industry
- Aerospace & Defense
- CEO
- Kathy J. Warden