Northrop Grumman Corp (NYSE:NOC) stock is down 7.8% to trade at $483.10 this morning. The defense company reported adjusted second-quarter earnings of $7.68 per share on $10.88 billion in revenue, both of which topped estimates. Northrop also hiked its full-year guidance amid a record $105 billion backlog.
Nevertheless, the stock is lower today perhaps due to a decline in operating income, a possible U.S.-Iran ceasefire looming, and potential defense budget cuts in the coming years.
NOC is now down 16% in 2026 and earlier hit a 52-week low of $479.02. The shares have ceded their year-over-year breakeven level, and have shaved 37.5% off their March 3 record high of $774.
Despite the technical struggles, 13 of 22 brokerages maintain "buy" or better ratings, with zero "sells" on the books, all while the consensus 12-month price target of $667.12 is a 37% premium from its current perch. Continued headwinds could prompt a shift from the analyst community.
Options traders may be ahead of the curve. The stock's 10-day put/call volume ratio of 1.19 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 92% of readings from the past year.
Options are an intriguing route, per the stock's Schaeffer's Volatility Scorecard (SVS) of 67 indicates NOC shares have exceeded options traders' volatility expectations by a healthy amount during the past year.
