Northrop Grumman reported fourth-quarter earnings of $7.23 per share, exceeding the consensus estimate by $0.26. Revenue for the period reached $11.71 billion, up 9.6% year-over-year and topping analyst expectations by $100 million. The company delivered a return on equity of 25.5% and maintained a net margin of 9.8%, reflecting sustained pricing power in its core defense segments. Trading volume surged to over 900,000 shares as the stock broke out of a multi-month consolidation and set a new 52-week high following the announcement.

For fiscal 2026, management guided to earnings per share in the range of $27.40 to $27.90, below the street consensus of $28.85. Revenue is expected between $43.5 billion and $44.0 billion, slightly shy of the consensus forecast, while free cash flow is forecast at $3.10 billion to $3.50 billion. Investors reacted with a modest pullback, as shares slipped by approximately 2% in pre-market trading despite an 84% jump in free cash flow to $3.24 billion in Q4 and a reduction in capital expenditures to $662 million.

Following the earnings release, at least four major brokerages raised their price targets and upgraded their ratings, including two firms moving to a 'buy' recommendation. Deutsche Bank set a new target that represents upside of more than 8% from current levels, while UBS increased its objective to reflect strengthened order backlog. The company also declared a quarterly dividend of $2.31 per share, translating to an annualized payout of $9.24 and a yield of 1.4%, with a payout ratio of 33.2%. Institutional ownership remains high at 83.4%, underscoring confidence among large investors.