Northrop Grumman Nicely Priced

Northrop Grumman Corp. (NOC) is one of the world's leading shipbuilders and the second largest defense contractor in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense (DoD), including electronic systems, information technology, submarines and surface ships, aircraft, space technology, and systems integration services.

Northrop Grumman offers a strong program portfolio positioned to take advantage of growth areas in the defense budget, an improving balance sheet, and an ongoing share repurchase program. Favorable projected revenue, the acquisition of 3001 International, raised fiscal 2008 guidance, diversified revenue and earnings streams with strong growth and discounted relative valuation metrics collectively support our bullish outlook for NOC.

Accordingly, we maintain our BUY recommendation on NOC common stock with a six-month target price of $52.00. Price appreciation to our near-term valuation target coupled with the $0.40 per share quarterly dividend which we deem secure and sustainable based upon low projected payouts represents 24.2% upside potential.

Read the full analyst report on NOC.

Read the full analyst report on NOC