Northrop's Arm Secures a Contract to Support E-2D Hawkeye Jets

Northrop Grumman Corp.’s NOC business unit, Northrop Grumman Systems, recently clinched a contract involving its E-2D Hawkeye jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.

Details of NOC’s Deal

Valued at $44.5 million, the contract is expected to be completed by August 2027. Per the terms of the deal, NOC will provide precision landing capability, engineering support to update documentation, and develop and test software changes to improve E-2D landing operations in contested environments for the Navy.

The majority of the work related to this deal will be executed in Liverpool, NY; El Segundo, CA; and Melbourne, FL.

Significance of NOC’s E-2D Jets

Northrop’s E-2D Hawkeye aircraft boasts battle management, theater air, missile defense and multiple sensor fusion capabilities in an airborne system. These provide the warfighter with expanded battlespace awareness, especially in the area of information operations.

Through its effective radar sensor and robust network-enabled capability, the Advanced Hawkeye aircraft provides critical, actionable data to joint forces and first responders.

These features must have been driving strong demand for this fighter jet. The latest contract win reflects another example of the aforementioned jet enjoying significant demand in the military aviation space, which, in turn, should boost NOC’s top-line performance.

NOC Stock’s Growth Potential

Per the Mordor Intelligence firm, rising military conflicts, terrorism and border disputes, along with rapid technological advancements in combat jets, have led nations to increase their defense spending on combat-proven jets, which constitute an integral part of their defense structure. The report also forecasts a compound annual growth rate of 4.7% for the global military aviation market during the 2025-2030 period.

Such growth prospects should benefit Northrop as its product portfolio offers a wide range of manned and unmanned aircraft that already enjoys an established position in the military aviation market. In addition to the E-2D Hawkeye jet, its aircraft portfolio features a wide range of jets such as the E-2C Hawkeye 2000, E-130J TACAMO, F-5 Tiger, A-10 Thunderbolt II and several others.

Opportunities for Other Defense Companies

Other aerospace companies that are likely to benefit from the expanding global military aviation market are discussed below:

Embraer ERJ: The company offers a comprehensive portfolio of the most advanced aircraft in the combat market, which includes the A-29 Super Tucano light attack and advanced trainer and the C-390 Millennium military multi-mission aircraft.

ERJ delivered an average earnings surprise of 103.7% in the last four quarters. The Zacks Consensus Estimate for ERJ’s 2025 sales indicates year-over-year growth of 16.1%.

The Boeing Company BA: The company offers a comprehensive portfolio of the most advanced aircraft in the combat market, which includes the F/A-18 Super Hornet, P-8, F-15EX, CH-47 Chinook, Chinook Block II, EA-18G Growler and a few more.

Boeing boasts a long-term (three to five years) earnings growth rate of 17.9%. The Zacks Consensus Estimate for BA’s 2025 sales implies an improvement of 28.8% from the prior-year number.

Lockheed Martin Corporation LMT: It is the manufacturer of some of the most advanced military jets in the world. Its key jet programs include the F-35 Lightning II, F-22 Raptor, F-16 Fighting Falcon and C-130 Hercules.

Lockheed Martin has a long-term earnings growth rate of 10.3%. The Zacks Consensus Estimate for LMT’s 2025 sales implies year-over-year growth of 4.5%.

NOC Stock Price Movement

In the past three months, Northrop’s shares have gained 16.6% compared with the industry’s 9.3% growth.

NOC’s Zacks Rank

Northrop currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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