Zacks Investment Research downgraded shares of Northrop Grumman Corporation (NOC) from OUTPERFORM to NEUTRAL on September 13, 2012, with a target price of $71.00.
Northrop Grumman offers a strong program portfolio positioned to take advantage of focus areas in the defense space, an improving balance sheet and an ongoing share repurchase program. Our bullish outlook for the company is supported by favorable projected revenue, diversified revenue and earnings streams, and discounted relative valuation metrics. However, this will be offset by apprehension regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, lower backlog, cost over-runs and reductions in the Afghanistan and Iraq operations. Thus, over the near-term, we do not find any near-term catalyst for Northrop Grumman and expect the company to perform in line with the broader market.
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