4Mês·

Northrop Grumman buy

New position: Northrop Grumman.

My reasoning: In my view, the geopolitical situation will not become more stable in the long term. Many countries are significantly increasing their defense budgets, while at the same time requirements for air defense, satellites, missile defense and modern military technology are increasing.

Northrop Grumman is active in areas such as

Defense Systems
Space & Satellites
missile defense
Stealth bombers
High-tech military infrastructure

Investment thesis:

More geopolitical tensions → higher defense spending → long-term increase in demand for modern military technology.

For me, this is more of a long-term addition with a focus on security technology and geopolitical trends rather than a short-term price fantasy.

How do you see defense stocks over the next 10-15 years?

25.05

Northrop Grumman

Comprado x1 em € 482,30

€ 482,30

3 Comentários

Smudo@Smudeo

4Mês

In the short term, the high start-up costs are weighing on profitability: adjusted EPS rose by just 1% to USD 26.34 in 2025. In the current financial year, CEO Kathy Warden expects an increase to USD 27.40 to 27.90. At the same time, sales are expected to increase to USD 43.5 to 44 billion (2025: USD 41.95 billion). The extensive multi-year order backlog of over USD 95.7 billion (as at December 31, 2025) provides planning security.

The valuation of the S&P 500 share has now risen to 27 times the expected earnings for 2026 (P/E ratio);
just over twelve months ago, the forward P/E ratio was 15.
This is comparable to Rheinmetall and Renk, which, however, are likely to show significantly higher earnings growth in the coming years.

For investors interested in armaments, the German stocks therefore offer a better risk/reward ratio.

The B-21 Raider stealth bomber, which is considered a strategic component of the US air force, remains at the heart of the growth prospects.

It is due to enter service in the mid to late 2020s and will secure the strategic power of the USA for decades to come.

According to the company, the test program is now progressing better than anticipated. Northrop is currently investing several billion dollars in capacity expansion in order to increase production rates and realize economies of scale.

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Domi@Domi9191

4Mês

@Smudeo The valuation of Northrop appears to be somewhat overstated. The current forward P/E ratio is rather in the range of ~19-20 and thus significantly below the 27 mentioned. At the same time, the company has an order backlog of > USD 95 bn, which offers exceptionally high visibility of future cash flows.

In the short term, high upfront and capacity costs related to the B-21 program are weighing on margins. In the long term, however, this very program could generate recurring revenues for decades through production, maintenance and modernization.

Rheinmetall and Renk are currently likely to have higher growth rates. Northrop, on the other hand, looks more like a quality stock with a strong market position in the US defense sector that can be planned for the long term. The risk/reward ratio therefore depends less on the sector and more on whether short-term growth or long-term stability is prioritized.

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Mr. K@TechNav

4Mês

Good price but also questionable timing

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