Movement Alert|Northrop Grumman Falls 3.03% in Regular Trading, Multiple Banks Slash Price Targets on Free Cash Flow Concerns

Market Focus07-10

On July 9, Northrop Grumman declined 3.03% in regular trading, trading at $528.48/share, with turnover of $205 million. The stock has come under sustained pressure as multiple investment banks issued target price cuts in rapid succession.

On the news front, Wells Fargo slashed its target from $800 to $620, Deutsche Bank reduced its target from $691 to $645, and Citigroup lowered its target from $628 to $587 while maintaining a Buy rating. The consensus mean price target has dropped from approximately $735 in April to around $685 currently. The downgrades reflect growing concerns over the company's free cash flow outlook after Northrop withdrew its mid-term cash flow guidance, citing an incremental $2.5 billion in capital investments needed to support the accelerating B-21 stealth bomber production ramp. The company raised its capital expenditure target for the year to approximately $1.85 billion, up $200 million from original plans, to meet surging demand across key defense programs.

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