Northrop Grumman (NOC) Soars After Trump Calls For $1.5T Defense Budget

Northrop Grumman Corp (NYSE:NOC) shares are surging on Thursday as the stock leads a rally in U.S. defense stocks following President Donald Trump’s call for increased government defense spending. Here’s what investors need to know.

• Northrop Grumman shares are climbing with conviction. Why is NOC stock up today?

How Trump’s Budget Proposal Ignites Defense Stocks

Shares of Northrop Grumman jumped 10% early Thursday, following Trump’s announcement that the military budget for 2027 should be $1.5 trillion, significantly higher than the previous $1 trillion target. This news has sparked optimism among defense contractors, with Northrop Grumman leading the charge.

In his remarks, Trump emphasized the need for a stronger military and criticized defense companies for prioritizing dividends and stock buybacks over investments in infrastructure. This sentiment has resonated across the sector, driving up stock prices for major players like Lockheed Martin Corp and RTX Corp.

Northrop Grumman shares are also higher Thursday morning after the company and Kratos Defense announced plans to rapidly develop a U.S. Marine Corps collaborative combat aircraft.

The effort will pair Kratos' Valkyrie unmanned system with Northrop's advanced mission kit and open-architecture autonomy software to create a cost-effective, flexible, high-endurance complement to crewed fighters.

Northrop Grumman’s Technical Indicators Signal Strength

Northrop Grumman is currently trading 10.1% above its 50-day simple moving average (SMA) and 9.1% above its 20-day SMA, indicating strong short-term momentum. Over the past 12 months, shares have increased by 35.90%, and they are currently positioned closer to their 52-week highs than lows.

The RSI stands at 49.99, which is considered neutral territory, suggesting that the stock is neither overbought nor oversold. Meanwhile, the MACD is above its signal line, indicating bullish momentum.

The combination of neutral RSI and bullish MACD suggests mixed momentum.

• Key Resistance: $641.00
• Key Support: $553.50

Earnings & Analyst Outlook

Investors are looking ahead to the next earnings report on January 27.

• EPS Estimate: $6.96 (Up from $6.39 YoY)
• Revenue Estimate: $11.61 billion (Up from $10.69 billion YoY)
• Valuation: P/E of 20.8x (Indicates fair valuation)

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $636.72. Recent analyst moves include:

• Morgan Stanley: Overweight (Lowered Target to $714.00)
• Alembic Global: Upgraded to Overweight (Target $662.00)
• Citigroup: Initiated with Buy (Target $654.00)

Valuation Insight: While the stock trades at a fair P/E multiple, the strong consensus and 9% expected earnings growth suggest analysts view this growth as justification for the 0% upside to analyst targets.

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for Northrop Grumman Corp. (NOC), highlighting its strengths and weaknesses compared to the broader market:

• Momentum: Bullish (Score: 73.51/100) — Stock is outperforming the broader market.
• Quality: Strong (Score: 77.18/100) — Balance sheet remains healthy.
• Value: Weak (Score: 30.82/100) — Trading at a steep premium relative to peers.

The Verdict: Northrop Grumman’s Benzinga Edge signal reveals a classic ‘High-Flyer’ setup. While the Momentum (73) confirms the strong trend, the low Value (30) score warns that the stock is priced for perfection—investors should ride the trend but use tight stop-losses.

Also Read: Why Are Defense Stocks Rising Today?

Top ETF Exposure

• iShares US Aerospace & Defense ETF (BATS:ITA): 4.37% Weight
• Invesco Aerospace & Defense ETF (NYSE:PPA): 5.60% Weight
• Global X Defense Tech ETF (NYSE:SHLD): 4.53% Weight

Significance: Because NOC carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

Price Action

NOC Price Action: Northrop Grumman shares were up 2.7% at $592.66 at the time of publication on Thursday, according to Benzinga Pro data.

Read Next: If You Invested $1000 In Northrop Grumman Stock 5 Years Ago, You Would Have This Much Today