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BAESY or NOC: Which Stock Stands Stronger in Today's Defense Boom?
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Key Takeaways
BAESY's 2025 EPS is expected to grow 37.7%, while NOC's is projected to decline 3.7%.
BAESY shares surged 53.9% over the past year, outpacing NOC's 18.3% gain.
NOC trades at a lower forward P/E than BAESY, but shows slower growth and falling EPS estimates.
As rising geopolitical tensions across the globe drive up military budgets, defense companies like BAE Systems plc ((BAESY - Free Report) ) and Northrop Grumman ((NOC - Free Report) ) are seeing strong investor interest. Increased spending on advanced defense technologies, equipment modernization and national security priorities is likely to benefit these two major players in the industry.
BAESY provides advanced defense, aerospace and security solutions, known for products like the Eurofighter Typhoon aircraft, CV90 combat vehicles and Astute-class submarines. On the contrary, Northrop Grumman is a more diverse aerospace-defense contractor, with products spanning across space, aeronautics, defense and cyberspace. Some of its key offerings range from autonomous systems and missile defense to satellite technologies and cybersecurity solutions.
As countries upgrade their defense systems with modern technologies, both BAESY and NOC, being prominent defense contractors with decades of experience, are well-positioned to benefit from the rising demand.
Now, to determine which one of these stocks presents a stronger investment opportunity, let’s take a closer look.
Key Takeaways for BAESY
Recent Achievements: BAE Systems has recently made strong strides in the defense industry through notable contract wins, product development and capacity enhancement. It has recently been selected to upgrade two Gulfstream aircraft into advanced airborne electronic attack platforms for the Italian Air Force. In July 2025, BAE Systems also completed trials of its TRV-150 unmanned aerial system using APKWS laser-guided rockets, offering a low-cost and precise strike option against evolving threats.
In the same month, the company was selected by the Air Force Research Laboratory (AFRL) to develop AI-powered software for improving battlefield medical care for warfighters. In June, BAE Systems opened a major shipbuilding facility in Glasgow. The new site is designed to improve productivity and can support the construction of two Type 26 frigates simultaneously.
Financial Stability: The company ended 2024 with cash and cash equivalents (including marketable debt securities) of $4.59 billion, down from $5.31 billion at the end of 2023. However, as of Dec. 31, 2024, it had a long-term debt of $9.86 billion and a current debt of $0.89 billion. So, the company holds a strong solvency position, at least in the short term.
Challenges to Note: Like other industry players, BAE Systems has also been facing global supply-chain disruptions. The company continues to face challenges related to the availability of critical components and specialized parts. These shortages have the potential to delay production schedules and increase costs, particularly in its aerospace and defense manufacturing programs.
In addition to material constraints, BAE Systems is also dealing with labor shortages across key production and engineering roles. As demand for defense equipment grows, the need for skilled labor has increased. Labor-related constraints can impact manufacturing timelines, slow down program execution and raise operational costs for BAE Systems.
Key Takeaways for NOC
Recent Achievements: Northrop Grumman achieved several notable milestones recently. In July 2025, the company achieved a major milestone with the successful test of a second-stage motor for ascent propulsion from another planet. This enables future missions to launch samples from Mars into orbit for rendezvous with an orbiter.
In the same month, NOC signed a Memorandum of Understanding with Romania’s ROMARM to jointly offer a cutting-edge ground-based radar system to the Romanian Air Force, enhancing NATO interoperability.
Moreover, in June, Northrop Grumman and Hanwha Systems entered into an agreement to collaborate on modernizing air and missile defense capabilities, strengthening the former’s position in global defense innovation.
Financial Stability: The company ended the second quarter of 2025 with cash and cash equivalents of $1.90 billion, down from $4.35 billion at the end of 2024. However, as of June 29, 2025, it reported a long-term debt of $15.16 billion while its current debt was nil. This indicates a relatively strong solvency position for NOC, at least in the short term.
Challenges to Note: Like BAESY and other defense contractors, Northrop Grumman also faces labor challenges, including difficulty in retaining skilled workers in manufacturing and engineering roles. High attrition among early-career employees and an aging workforce could impact production timelines and overall efficiency.
Additionally, recent changes in trade policies and increased tariffs on imported materials by the U.S. government may lead to higher production costs and supply-chain disruptions. These factors could affect the company’s ability to deliver products on schedule and may impact future performance.
How do EPS Estimates Compare for BAESY & NOC?
The Zacks Consensus Estimate for BAESY’s 2025 earnings per share (EPS) is pegged at $4.02, which indicates year-over-year growth of 37.7%. The consensus estimate for 2025 revenues is pegged at $40.76 billion, which indicates year-over-year growth of 63.2%. The company’s 2025 and 2026 EPS estimates have moved north over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2025 EPS is pegged at $25.11, which indicates a year-over-year decline of 3.7%. The consensus estimate for 2025 revenues is pegged at $42.13 billion, which indicates year-over-year growth of 2.7%. The company’s near-term EPS estimates have moved south over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: BAESY vs NOC
BAESY has outperformed NOC over the past year. Shares of BAESY gained 53.9% compared with shares of NOC, which gained 18.3%.
Image Source: Zacks Investment Research
NOC’s Valuation More Attractive Than BAESY
BAESY shares are expensive on a relative basis, with its forward 12-month Price/Earnings (P/E F12M) being 23.23X compared with NOC’s P/E F12M of 21.09X.
Image Source: Zacks Investment Research
Conclusion
Both BAE Systems and Northrop Grumman are strong defense companies with solid government ties and a wide range of products. However, BAE Systems appears to have the edge over NOC for now. Its earnings estimates have been rising and its stock has delivered better returns than Northrop Grumman over the past year.
Although NOC remains a reliable defense player offering better valuation and a stable financial base, BAE Systems looks more attractive for investors seeking growth and momentum.
Image: Bigstock
BAESY or NOC: Which Stock Stands Stronger in Today's Defense Boom?
Key Takeaways
As rising geopolitical tensions across the globe drive up military budgets, defense companies like BAE Systems plc ((BAESY - Free Report) ) and Northrop Grumman ((NOC - Free Report) ) are seeing strong investor interest. Increased spending on advanced defense technologies, equipment modernization and national security priorities is likely to benefit these two major players in the industry.
BAESY provides advanced defense, aerospace and security solutions, known for products like the Eurofighter Typhoon aircraft, CV90 combat vehicles and Astute-class submarines. On the contrary, Northrop Grumman is a more diverse aerospace-defense contractor, with products spanning across space, aeronautics, defense and cyberspace. Some of its key offerings range from autonomous systems and missile defense to satellite technologies and cybersecurity solutions.
As countries upgrade their defense systems with modern technologies, both BAESY and NOC, being prominent defense contractors with decades of experience, are well-positioned to benefit from the rising demand.
Now, to determine which one of these stocks presents a stronger investment opportunity, let’s take a closer look.
Key Takeaways for BAESY
Recent Achievements: BAE Systems has recently made strong strides in the defense industry through notable contract wins, product development and capacity enhancement. It has recently been selected to upgrade two Gulfstream aircraft into advanced airborne electronic attack platforms for the Italian Air Force. In July 2025, BAE Systems also completed trials of its TRV-150 unmanned aerial system using APKWS laser-guided rockets, offering a low-cost and precise strike option against evolving threats.
In the same month, the company was selected by the Air Force Research Laboratory (AFRL) to develop AI-powered software for improving battlefield medical care for warfighters. In June, BAE Systems opened a major shipbuilding facility in Glasgow. The new site is designed to improve productivity and can support the construction of two Type 26 frigates simultaneously.
Financial Stability: The company ended 2024 with cash and cash equivalents (including marketable debt securities) of $4.59 billion, down from $5.31 billion at the end of 2023. However, as of Dec. 31, 2024, it had a long-term debt of $9.86 billion and a current debt of $0.89 billion. So, the company holds a strong solvency position, at least in the short term.
Challenges to Note: Like other industry players, BAE Systems has also been facing global supply-chain disruptions. The company continues to face challenges related to the availability of critical components and specialized parts. These shortages have the potential to delay production schedules and increase costs, particularly in its aerospace and defense manufacturing programs.
In addition to material constraints, BAE Systems is also dealing with labor shortages across key production and engineering roles. As demand for defense equipment grows, the need for skilled labor has increased. Labor-related constraints can impact manufacturing timelines, slow down program execution and raise operational costs for BAE Systems.
Key Takeaways for NOC
Recent Achievements: Northrop Grumman achieved several notable milestones recently. In July 2025, the company achieved a major milestone with the successful test of a second-stage motor for ascent propulsion from another planet. This enables future missions to launch samples from Mars into orbit for rendezvous with an orbiter.
In the same month, NOC signed a Memorandum of Understanding with Romania’s ROMARM to jointly offer a cutting-edge ground-based radar system to the Romanian Air Force, enhancing NATO interoperability.
Moreover, in June, Northrop Grumman and Hanwha Systems entered into an agreement to collaborate on modernizing air and missile defense capabilities, strengthening the former’s position in global defense innovation.
Financial Stability: The company ended the second quarter of 2025 with cash and cash equivalents of $1.90 billion, down from $4.35 billion at the end of 2024. However, as of June 29, 2025, it reported a long-term debt of $15.16 billion while its current debt was nil. This indicates a relatively strong solvency position for NOC, at least in the short term.
Challenges to Note: Like BAESY and other defense contractors, Northrop Grumman also faces labor challenges, including difficulty in retaining skilled workers in manufacturing and engineering roles. High attrition among early-career employees and an aging workforce could impact production timelines and overall efficiency.
Additionally, recent changes in trade policies and increased tariffs on imported materials by the U.S. government may lead to higher production costs and supply-chain disruptions. These factors could affect the company’s ability to deliver products on schedule and may impact future performance.
How do EPS Estimates Compare for BAESY & NOC?
The Zacks Consensus Estimate for BAESY’s 2025 earnings per share (EPS) is pegged at $4.02, which indicates year-over-year growth of 37.7%. The consensus estimate for 2025 revenues is pegged at $40.76 billion, which indicates year-over-year growth of 63.2%. The company’s 2025 and 2026 EPS estimates have moved north over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NOC’s 2025 EPS is pegged at $25.11, which indicates a year-over-year decline of 3.7%. The consensus estimate for 2025 revenues is pegged at $42.13 billion, which indicates year-over-year growth of 2.7%. The company’s near-term EPS estimates have moved south over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: BAESY vs NOC
BAESY has outperformed NOC over the past year. Shares of BAESY gained 53.9% compared with shares of NOC, which gained 18.3%.
Image Source: Zacks Investment Research
NOC’s Valuation More Attractive Than BAESY
BAESY shares are expensive on a relative basis, with its forward 12-month Price/Earnings (P/E F12M) being 23.23X compared with NOC’s P/E F12M of 21.09X.
Image Source: Zacks Investment Research
Conclusion
Both BAE Systems and Northrop Grumman are strong defense companies with solid government ties and a wide range of products. However, BAE Systems appears to have the edge over NOC for now. Its earnings estimates have been rising and its stock has delivered better returns than Northrop Grumman over the past year.
Although NOC remains a reliable defense player offering better valuation and a stable financial base, BAE Systems looks more attractive for investors seeking growth and momentum.
Both BAESY and NOC currently hold a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here.