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    NOC · NYQ · Industrials

    Northrop Grumman Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 582.09

    Market price

    USD 555.32

    Implied upside

    +4.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedBeta of -0.136 is not usable in a cost of equity. Clamped to 0.30.

    Value Per Share

    Perpetuity growth
    USD 582.09+4.8%
    Exit multiple
    USD 638.76+15.0%
    Market price
    USD 555.32

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 44.1bnUSD 46.9bnUSD 49.7bnUSD 52.4bnUSD 55.1bnUSD 57.5bnUSD 59.8bnUSD 61.9bnUSD 63.8bnUSD 65.4bn+4.5%
    EBITUSD 4.1bnUSD 4.4bnUSD 4.6bnUSD 4.9bnUSD 5.1bnUSD 5.3bnUSD 5.6bnUSD 5.7bnUSD 5.9bnUSD 6.1bn+4.5%
    NOPATUSD 3.4bnUSD 3.6bnUSD 3.9bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.6bnUSD 4.8bnUSD 4.9bnUSD 5.1bn+4.5%
    Add depreciation & amortisationUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bn+4.5%
    Less capital expenditureUSD -1.8bnUSD -2.0bnUSD -2.1bnUSD -2.3bnUSD -2.5bnUSD -2.7bnUSD -2.9bnUSD -3.1bnUSD -3.2bnUSD -3.4bn+7.5%
    Capex, % of revenue4.1%4.2%4.3%4.4%4.6%4.7%4.8%5.0%5.1%5.2%-
    Less increase in working capitalUSD -466.0kUSD -630.1kUSD -619.4kUSD -601.9kUSD -577.3kUSD -545.7kUSD -507.1kUSD -461.7kUSD -409.9kUSD -352.3k-3.1%
    Free cashflow to firmUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.8bnUSD 3.9bnUSD 3.9bnUSD 3.9bn+2.4%
    Discount factor0.97170.91760.86650.81820.77270.72960.68900.65060.61440.5801-
    Present valueUSD 3.1bnUSD 3.0bnUSD 3.0bnUSD 2.9bnUSD 2.8bnUSD 2.7bnUSD 2.6bnUSD 2.5bnUSD 2.4bnUSD 2.3bn-
    Present Value Of The ForecastUSD 27.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.300Clamped from a reported -0.136
    Cost of equity6.16%Risk-free + beta x equity risk premium
    Cost of debt5.59%Risk-free + 70bp, the spread for a A+ rating at 6.4x interest cover. Book interest / average debt was lower, at 4.0%.
    Market capitalisationUSD 78.9bn82.3% of capital
    Total debtUSD 17.0bn17.7% of capital, book value as a proxy
    Tax rate16.4%Effective, capped at statutory
    WACC5.90%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 582.09

    71% of EV

    Forecast FCFF, final year
    USD 3.9bn
    Capex at depreciation, working capital in reinvestment
    USD 5.1bn
    Less reinvestment at g/ROIC (22.4% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 3.9bn
    ROIC (reported)
    11.2%
    Terminal value, undiscounted
    USD 118.7bn
    Terminal value, discounted
    USD 68.9bn
    Enterprise value
    USD 96.3bn
    Less net debt
    USD 12.6bn
    Equity value
    USD 83.7bn

    Exit at 15.9x EBITDA

    Value per shareUSD 638.76

    74% of EV

    Terminal value, undiscounted
    USD 132.7bn
    Terminal value, discounted
    USD 77.0bn
    Enterprise value
    USD 104.5bn
    Less net debt
    USD 12.6bn
    Equity value
    USD 91.9bn

    Spread between methods: 9%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.90%1030.891208.431516.082171.004479.35
    4.90%701.30763.97854.53995.001238.90
    5.90%521.69547.50582.08629.96699.46
    6.90%408.71419.41433.38451.91476.99
    7.90%331.13334.74339.68346.35355.34

    Outlined: this model. Green text: above today's price of 555.32. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.7%4.5%4.1%
    EBIT margin10.6%9.3%8.9%
    Discount rate-5.9%6.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.