(NOC) Northrop Grumman Analyst Remains Neutral on Shares

Northrop Grumman Corporation (NOC) posted mixed results for the December quarter surpassing the Zacks Consensus Estimate on the bottom line but missing the consensus at the top. Looking forward, the company offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program. Our bullish outlook for the company is supported by favorable projected revenue, diversified revenue and earnings streams, and discounted relative valuation metrics. However, our bullishness would be tempered by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the DOD budget, lower backlog, cost over-runs and reductions in the Afghanistan and Iraq operations. Northrop Grumman is the fourth largest U.S. defense contractor behind The Boeing Company (BA); Lockheed Martin Corporation (LMT); and