Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. The company's Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, integrates, and produces tactical weapons and missile defense solutions, and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. It also offers integrated, all-domain command, and control battle management systems, precision strike weapons; high speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions and advanced fuzes; aircraft and mission systems logistics support, sustainment, operations and modernization; and warfighter training services. The company's Mission Systems segment offers command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. Northrop Grumman Corporation was founded in 1939 and is based in Falls Church, Virginia.

Northrop Grumman Corporation

Key Points
The U.S. DSCA notified Congress of $22.5 billion in pending weapons sales last month.
Lockheed Martin and Boeing were the month's biggest winners.
2026 started with a bang! for defense investors. The month of January saw the U.S. Defense Security Cooperation Agency -- or DSCA, the Pentagon's personal international arms dealer -- submit no fewer than 11 separate arms deals to Congress for approval, totaling $22.5 billion in combined value.
Denmark is buying Hellfire missiles from Lockheed Martin (NYSE: LMT). Israel is ordering helicopters from Leonardo USA. Spain requires assistance from multiple U.S. defense companies to upgrade its fleet of F-100 frigates -- and these are among the smaller arms deals in the works.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Among the larger awards handed out...
$9 billion for Lockheed in Saudi Arabia
Arguably, the biggest beneficiary of the flurry of early 2026 arms deals is defense giant Lockheed Martin, the world's largest pure-play defense contractor. On Jan. 30, DSCA notified Congress of a planned sale of 730 PATRIOT Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) missiles and related equipment to the Kingdom of Saudi Arabia.
In total, the contract should be worth $9 billion. While RTX Corporation is closely involved in PATRIOT, building the radar systems that enable it to shoot down hostile aircraft and missiles, Lockheed was named the sole principal contractor on this contract.
$2.3 billion for Boeing in Singapore
Ten days before that award, Boeing (NYSE: BA) notched a win when DSCA told Congress that the nation of Singapore wants to buy four P-8A Poseidon patrol aircraft and arm them with eight MK 54 Lightweight Torpedoes.
The aircraft presumably make up the majority of the $2.3 billion value of this contract, meaning Boeing should win the bulk of that money. RTX makes the MK 54, but in this particular case, DSCA says it will supply Singapore with torpedoes from Pentagon stockpiles -- meaning no extra revenue for RTX on this contract, either.
$3.8 billion for Boeing and Lockheed in Israel
The other really big contract last month went to Boeing and Lockheed, both of which are named principal contractors. For $3.8 billion, Israel will be ordering up 30 AH-64E Apache attack helicopters -- plus "related equipment." Boeing builds the birds themselves, while Lockheed and its partner Northrop Grumman provide the Longbow Fire Control Radars that help the Apaches shoot straight (and are also part of Israel's order).
Boeing and Lockheed won't keep all the loot. In addition to Northrop taking a cut, DSCA notes that Israel needs 70 T700-GE 701D engines to fly the Apaches, and Boeing will have to buy those from its engine supplier, GE Aerospace.
What does this mean for investors?
As I read these contracts, it appears Lockheed Martin is the defense company benefiting most from January's defense contracts. Although I expect Boeing will take most of the money from the Apache sale and essentially all the cash from selling Poseidons to Singapore, Boeing's defense division remains unprofitable.
Lockheed's Missiles and Fire Control (MFC) division, in contrast, which will build both Saudi Arabia's Patriot missiles and the Longbow fire controls for Israel's new helicopters, is in fact the company's most profitable division. According to data from S&P Global Market Intelligence, Lockheed MFC earned 13% margins on its revenue in 2025.
Advantage: Lockheed Martin stock.
Should you buy stock in Lockheed Martin right now?
Before you buy stock in Lockheed Martin, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lockheed Martin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,108!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,145,980!*
Now, it’s worth noting Stock Advisor’s total average return is 886% — a market-crushing outperformance compared to 193% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 14, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, GE Aerospace, and RTX. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

U.S. International Arms Deals Surge to $22.5 Billion in January

Key Points
Northrop Grumman beat on earnings last month, but its guidance looks weak.
At 30x free cash flow, Northrop Grumman anticipates sales growth in the low-to-mid single digits.
In a bad earnings season for defense stocks in general, Northrop Grumman (NYSE: NOC) was one of the few winners. Shares of rivals General Dynamics and Textron both dipped despite reporting earnings "beats" last month. Northrop, in contrast, beat earnings expectations and saw its stock rise. The share price jumped 2.7% on earnings day, and the stock is now up a total of 7.3% since earnings came out.
Why? Heading into Northrop's report, analysts expected the defense contractor to earn $6.96 per share in Q4 on $11.6 billion in sales. Northrop's reported $7.23 per share "adjusted" profit beat the earnings forecast, while the company's GAAP earnings of $9.99 per share crushed it. A reported $11.7 billion in quarterly sales edged out that estimate as well.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Northrop Grumman Q4 and full-year earnings
Northrop Grumman grew its sales 10% year over year in Q4, versus just 2% growth (to $42 billion) for the year as a whole. Earnings per share climbed 15% for the quarter, versus just 3% for the year.
Free cash flow for the quarter climbed 84%, to $2.2 billion, and was up 27% for the year at $3.3 billion. That was still less than Northrop reported as full-year net profit, however -- $4.2 billion, or $29.08 per diluted share.
As a result, while Northrop Grumman has a 24.4x price-to-earnings ratio today, its valuation based on free cash flow is quite a bit richer: Northrop's price-to-free cash flow ratio is 30.5.
Is Northrop Grumman stock a buy?
Whether that's a fair price depends mainly on how fast Northrop is growing. Is it low single digits, as it did in 2025, the mid-teens rate it accelerated to in Q4, or something different?
This is where things might get dicey for Northrop.
Turning to guidance, Northrop forecast approximately 4% sales growth in 2026, to $43.8 billion, with adjusted earnings of about $27.65 per share. Both numbers fell short of analyst guidance, and the earnings number, in particular (although "adjusted"), appears to imply a decline in profit from the $29.08 per share, GAAP, that Northrop earned in 2025.
Free cash flow is forecast to hold steady (and remain below reported profit) at about $3.3 billion in 2026 -- which makes sense given management's note that its book-to-bill ratio was precisely 1.0 in 2025. (With new order bookings balanced against fulfilled orders billed, sales and earnings -- and free cash flow, too -- are likely to hold steady, but not grow much, this year.)
For this reason, despite management boasting of a "new company record of $95.7 billion" in backlog, I believe Northrop Grumman stock costs too much relative to the company's growth prospects. Northrop stock is a sell for me.
Should you buy stock in Northrop Grumman right now?
Before you buy stock in Northrop Grumman, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Northrop Grumman wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,353!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,155,789!*
Now, it’s worth noting Stock Advisor’s total average return is 920% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 11, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Textron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Northrop Grumman Stock a 2026 Buy After Its 2025 Earnings Beat?

The board of directors of Phillips 66 has declared a quarterly dividend of $1.27 per share on Phillips 66 common stock, representing a $0.07 increase. The dividend is payable on March 4, 2026, to shareholders of record as of the close of business on Feb. 23, 2026. "We are increasing the dividend this quarter, reflecting our confidence in our ability to generate through-cycle cash flows," said Mark Lashier, chairman and CEO of Phillips 66. "The strength and durability of cash flows from our combined businesses support our priority to return capital to shareholders through a secure, competitive and growing dividend," Lashier said. "Since our formation in 2012, the annual dividend has increased every year, resulting in a significant 15 percent compound annual growth rate."
Gilead Sciences today announced that the company's Board of Directors has declared an increase of 3.8% in the company's quarterly cash dividend, beginning in the first quarter of 2026. The increase will result in a quarterly dividend of $0.82 per share of common stock. The dividend is payable on March 30, 2026, to stockholders of record at the close of business on March 13, 2026.
Mastercard today announced that its Board of Directors has declared a quarterly cash dividend of 87 cents per share. The cash dividend will be paid on May 8, 2026 to holders of record of its Class A common stock and Class B common stock as of April 9, 2026.
The board of directors of Northrop Grumman declared a quarterly dividend of $2.31 per share on Northrop Grumman common stock, payable March 11, 2026, to shareholders of record as of the close of business February 23, 2026.
Kraft Heinz announced today that the Company's Board of Directors declared a regular quarterly dividend of $0.40 per share of common stock payable on March 27, 2026, to stockholders of record as of March 6, 2026.
VIDEO: Daily Dividend Report: PSX,GILD,MA,NOC,KHC
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Daily Dividend Report: PSX,GILD,MA,NOC,KHC

(1:00) - European Defense Industry: How Are NATO Alliances Funded?
(10:10) - Middle East Dynamic: What Should Investors Expect?
(13:45) - Navigating The Current Defense Industry: Where Should You Look To Invest?
(21:20) - Gabelli Commercial Aerospace and Defense ETF: GCAD
(25:00) - Episode Roundup: GCAD, ITA, XAR, EUAD, SHLD
In this episode of ETF Spotlight, I speak with Tony Bancroft, portfolio manager of the Gabelli Commercial Aerospace & Defense ETF GCAD, about the outlook for the aerospace and defense industry in 2026.
The sector had already delivered strong performance last year, driven by rising defense spending amid escalating geopolitical tensions. European defense stocks, in particular, surged as governments ramped up military budgets, partly in response to pressure from President Trump on NATO members to increase their own defense spending.
More broadly, European countries boosted their defense industries primarily in response to Russia’s war in Ukraine. We saw a brief pullback late last year amid signs of potential progress toward ending the conflict.
President Trump has suggested the war could be resolved in the near future, but so far there has been little tangible progress, despite months of diplomatic efforts by his administration.
Defense stocks surged earlier this year following Venezuela-related news, then climbed again after President Trump called for a $1.5 trillion defense budget in 2027, more than 50% above the $901 billion approved for 2026.
Unfortunately, the world is becoming a more dangerous place, with the Russia-Ukraine war, rising tensions between China and Taiwan, India and Pakistan, and continued conflicts across the Middle East. This backdrop continues to support the sector.
Boeing BA, Lockheed Martin LMT, and Northrop Grumman NOC are among the top holdings in the Gabelli Commercial Aerospace & Defense ETF GCAD.
Other popular products in the space include the iShares U.S. Aerospace & Defense ETF ITA, the SPDR S&P Aerospace & Defense ETF XAR, the Global X Defense Tech ETF SHLD, and the Select STOXX Europe Aerospace & Defense ETF EUAD.
Tune in to the podcast to learn more.
Be sure to look out for the next edition of ETF Spotlight, and remember to subscribe!
If you have any comments or questions, please email podcast@zacks.com
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can the Aerospace and Defense Rally Continue in 2026?

Key Points
New NATO commitments are pushing European defense spending up.
Hostilities in the Middle East are expected to push new spending in the region.
Trump is encouraging and enabling greater spending on weapons worldwide.
Defense stocks soared in January. The S&P Aerospace and Defense Select index is up about 11% so far in 2026, driven higher by elevated geopolitical uncertainty, increased defense spending, and expectations of even greater government expenditures on military technologies in the near term.
The State Street SPDR S&P Aerospace & Defense ETF (NYSEMKT: XAR), which tracks that index, is up about 10.5% year to date vs. the S&P 500 index, which has risen only about 1%.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Three defense stocks in particular stand out, all of them up more than 20% in 2026 after only about a month:
It looks likely that these stocks have even more potential upside if you consider the factors that have been driving them higher and how those factors may play out through the remainder of this decade.
Global defense spending is rising rapidly
From the start of his second term, President Donald Trump has demanded that NATO members step up their defense spending. The alliance's former goal was for each member nation to spend 2% of its gross domestic product (GDP) on defense. But under pressure from the White House, in June of 2025, that goal was boosted to 5% by 2035. That 5% will consist of 3.5% on pure defense and the rest on defense-related infrastructure.
That's quite an increase, considering some of the largest economies in the world are NATO members, including Germany, the United Kingdom, and France. Germany, with a GDP of more than $5 trillion, has announced plans to double defense spending within five years, hitting the 5% goal before 2030.
We're now seeing the effects of those commitments. Global defense spending is expected to hit $2.6 trillion this year, an 8.1% increase over 2025. Spending is forecast to hit $2.9 trillion by the end of the decade.
Two major new U.S. defense projects and Trump initiatives -- the Golden Dome missile defense shield and the Golden Fleet plan, aimed at building up the U.S. Navy -- will drive even more U.S. defense spending. Lockheed Martin, Northrop Grumman, and Huntington Ingalls Industries are among the major contractors involved in those projects.
Trump's plan for the U.S. Navy includes a new battleship class that has been dubbed the Trump class. As my Motley Fool colleague Rich Smith wrote recently, "Everyone who's anyone in defense should profit off the new Trump-class battleships."
Global aggressions are growing and spurring defense spending
What's more, Trump's recent aggressive stance on acquiring Greenland has rattled the North Atlantic alliance. As a result, the European Union is expected to accelerate investment in its own defense capabilities, including air and missile defense, cyber operations, and rapid-response forces.
Further, U.S.-Iran hostilities continue to build, and the Middle East, unfortunately, is becoming a more dangerous place by the month. As one analyst at Forecast International, a market intelligence firm for aerospace and defense, put it, "Virtually every country in the Middle East is either itself involved in a shooting war or is neighboring a country that is involved in a shooting war. And so ultimately, the way these countries are going to react to it is they're going to spend heavily on defense."
Just last week, the Trump administration approved two enormous arms sales, one to Israel for $6.67 billion and another to Saudi Arabia for $9 billion. Products they'll buy include weapons built by U.S. defense firms, from Patriot missiles to Apache attack helicopters.
Who benefits from such massive sales? Primarily, U.S. defense firms. It's a dangerous world, unfortunately. And governments around the globe are arming for it. U.S. defense firms -- and their shareholders -- will be huge beneficiaries.
Should you buy stock in SPDR Series Trust - State Street SPDR S&P Aerospace & Defense ETF right now?
Before you buy stock in SPDR Series Trust - State Street SPDR S&P Aerospace & Defense ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SPDR Series Trust - State Street SPDR S&P Aerospace & Defense ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $436,126!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,053,659!*
Now, it’s worth noting Stock Advisor’s total average return is 885% — a market-crushing outperformance compared to 192% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 6, 2026.
Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Group of Stocks Is Soaring in 2026. Trump May Send Them Higher Still.

Lockheed Martin’s LMT shares have risen 17.8% in the past month, outperforming the Zacks Aerospace-Defense industry’s growth of 4%. With a strong presence across the Army, Air Force, Navy and defense IT programs, Lockheed Martin benefits from high switching costs and long-term government commitments, ensuring a steady stream of follow-on orders and predictable revenues over time.
Image Source: Zacks Investment Research
Along with LMT, other defense stocks like Northrop Grumman NOC and General Dynamics GD also stand to benefit from the rising U.S. defense budget. Shares of Northrop Grumman have risen 12.9% while those of General Dynamics have declined 0.5% during the same time frame.
Considering Lockheed Martin’s outperformance compared with its industry, investors might be left wondering if this is a good time to add LMT stock to their portfolio. Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.
Factors Acting in Favor of LMT
Lockheed Martin is one of the largest U.S. defense contractors with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT program. The company stands to benefit from the rising U.S. defense budget. In January 2026, President Trump proposed raising military spending to about $1.5 trillion in 2027, up from $901 billion in 2026.
In February 2026, the U.S. government awarded Lockheed Martin a $328.5 million Foreign Military Sales (“FMS”) contract for the production of IRST21 Legion-ES sensor systems. The contract strengthens LMT’s position in advanced infrared sensing technology, reinforcing its role as a key supplier of next-generation threat detection systems for fighter aircraft. It also expands the company’s footprint in international defense markets.
During the same time, Lockheed Martin announced a collaboration with Fujitsu to accelerate technology development in several critical areas. LMT has gained access to Fujitsu’s advanced capabilities, which can speed innovation and enhance performance in future defense systems. The partnership broadens LMT’s technological leadership, strengthens its competitive position, and helps it develop cutting-edge tools.
The F-35 program continues to be a key growth driver for the company’s Aeronautics business segment. This program generated approximately 27% of LMT’s total consolidated net sales in 2025. The company has delivered 1,293 F-35 airplanes since the program's inception, with 368 jets in the backlog as of Dec 31, 2025. This surely boosts expectation for the Aeronautics business segment’s sales, which improved 6.4% year over year in the fourth quarter of 2025.
Challenges Faced by LMT
Lockheed Martin experienced performance issues on a classified fixed-price incentive fee contract in its Aeronautics business segment and periodically recognized reach-forward losses. During 2025, the company recorded losses of $950 million on this program. It also reported losses of $570 million in the Canadian Maritime Helicopter Program, $95 million in the Turkish Utility Helicopter Program at its RMS business segment and $140 million of unfavorable profit adjustments on C-130 programs at its Aeronautics business segment. The company may incur additional losses in future periods if it experiences further performance issues, increases in scope, or cost growth, which could be material to its financial results.
Estimates for LMT Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) has risen 0.47% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 14.69%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Northrop Grumman’s 2026 EPS has declined 1.77% over the past 60 days. NOC’s long-term earnings growth rate is 4.8%. The consensus estimate for General Dynamics’ 2026 EPS has declined 2.74% over the past 60 days. GD’s long-term earnings growth rate is 10.3%.
LMT’s Earnings Surprise History
The company beat on earnings in each of the trailing four quarters, delivering an average surprise of 14.01%.
Image Source: Zacks Investment Research
LMT’s Debt Position
Currently, the company’s total debt to capital is 76.35%, higher than the industry’s average of 51.29%.
Image Source: Zacks Investment Research
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.78X, a discount to the industry’s average of 2.73X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with that of its peer group.
Image Source: Zacks Investment Research
What Should an Investor Do?
Lockheed Martin benefits from its dominant, platform-centric defense portfolio, rising U.S. military spending and key contract wins, which strengthen its global reach and innovation capabilities. The F-35 program remains a major growth driver, contributing about 27% of 2025 sales, supported by a strong delivery track record, a sizable backlog and solid year-over-year growth in the Aeronautics segment.
However, considering its financial pressures and higher debt levels, new investors should wait and look for a better entry point. Those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to retain it, considering the company’s impressive earnings growth projection.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is LMT Stock a Buy, Hold or Sell After 17.8% Rise in a Month?

The Boeing Company’s BA shares have rallied 2.2% in a month compared with the Zacks Aerospace-Defense industry’s growth of 3%. The company remains one of the largest U.S. commercial aircraft manufacturers. Steadily growing commercial air travel should boost Boeing’s service business unit. The outlook for Boeing’s defense and space business segment also remains optimistic.
Image Source: Zacks Investment Research
In particular, the current U.S. government’s inclination toward strengthening the nation’s defense and space system should act as a growth catalyst for Boeing and other defense stocks, such as General Dynamics GD and Northrop Grumman NOC. Shares of General Dynamics have declined 0.1% while those of Northrop Grumman have risen 15.3% during the same time frame.
Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.
Factors Acting in Favor of BA
Boeing continues to benefit from strong demand in commercial aerospace, reflected in solid aircraft orders and deliveries, while its defense and space businesses also maintain a positive outlook given its leading global contractor position.
During the fourth quarter of 2025, the company booked 336 net commercial airplane orders. Such solid order activities should continue to bolster revenue performance for Boeing’s commercial business over the long run. During the fourth quarter of 2025, the Boeing Defense, Space & Security (“BDS”) unit booked $15 billion in orders, including contracts for 15 KC-46A tankers from the U.S. Air Force and 96 Apaches from Poland, which resulted in a solid backlog amount of $85 billion for this segment as of Dec. 31, 2025. Such solid contract wins and subsequent backlog count should continue to bolster the BDS unit’s revenues. The unit’s top line reflected solid year-over-year growth of 37% in the fourth quarter.
In February 2026, Boeing and Air Cambodia announced the airline's largest single-aisle order for up to 20 737 MAX airplanes. Boeing will benefit from this order through added commercial aircraft revenues and a stronger order backlog, while also securing a new airline customer in the fast-growing Southeast Asian aviation market.
In January 2026, Boeing and Alaska Airlines announced the carrier's largest-ever airplane order. This order will also significantly benefit Boeing by boosting its order backlog and improving long-term revenue visibility, while also reinforcing demand for its 737 and 787 programs.
Challenges Faced by BA
While Boeing presents strong growth potential, it also faces several key challenges that investors should weigh carefully. Although global air travel demand continues to recover and expand, the aviation industry remains constrained by persistent supply-chain disruptions, including shortages of engines, castings and other critical components.
These bottlenecks have delayed aircraft deliveries and increased production costs, limiting manufacturers’ ability to fully capitalize on rising demand. During 2025, aircraft order cancellations totaled $11.09 billion, mainly for 777X, 737, and 787 models, which impacted the revenue potential of the Boeing Commercial Airplanes segment.
BA Stock’s Estimates
The Zacks Consensus Estimate for 2026 earnings per share (EPS) has decreased 37.11% in the past 60 days. BA’s long-term (three to five years) earnings growth rate is 31.33%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for General Dynamics’ 2026 EPS has decreased 2.7% in the past 60 days. GD’s long-term earnings growth rate is 10.3%. The consensus estimate for Northrop Grumman’s 2026 EPS has decreased 1.8% in the past 60 days. NOC’s long-term earnings growth rate is 4.8%.
BA’s Earnings Surprise History
The company beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 80.4%.
Image Source: Zacks Investment Research
BA’s ROE Higher Than the Industry
Boeing’s trailing 12-month return on equity of 360.39% is higher than the industry average of 10.99%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
BA Stock’s Valuation
In terms of valuation, Boeing’s trailing 12-month price/book (P/B) is 32.51X, a premium to the industry’s average of 6.96X.
Image Source: Zacks Investment Research
What Should an Investor Do?
Boeing is benefiting from strong demand across its commercial, defense and space businesses, with robust aircraft orders driving revenue growth and expanding backlogs in both commercial airplanes and the BDS segment. Recent major contract wins strengthen Boeing’s backlog, market presence and long-term revenue visibility.
However, considering its negative earnings estimates and higher valuation, new investors should wait and look for a better entry point. Those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to retain it, considering the company’s long-term growth projection and higher ROE. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free Report: Profiting from the 2nd Wave of AI Explosion
The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.
Investors who bought shares like Nvidia at the right time have had a shot at huge gains.
But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.
Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.
Access AI Boom 2.0 now, absolutely free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Boeing Stock Surges 2.2% in a Month: What Should Investors Know?

Geopolitical tensions have accounted for the bulk of market volatility so far in 2026, from U.S. military actions in Syria and Venezuela earlier in January to renewed risk of an escalating U.S.-Iran conflict.
This fragile backdrop is keeping markets on edge, reinforcing the view that sustained geopolitical uncertainty will likely shape investor sentiment and emerge as a recurring theme throughout 2026. This is further underscored by expectations of rising global military spending in the year ahead.
Record Defense Budgets Fuel Aerospace & Defense Momentum
In early January, President Trump proposed a $1.5 trillion U.S. military budget for 2027, a sharp increase from the $901 billion approved for 2026. According to analysts at Forecast International, global defense outlays are expected to climb to $2.6 trillion by the end of 2026, with momentum pointing toward $2.9 trillion by the decade's end, as quoted on National Defense Magazine.
Per Derek Bisaccio, defense markets and strategic analysis lead analyst at Forecast International, the projected $2.6 trillion in global defense spending marks an 8.1% increase over 2025, led by the United States, which remains the world’s largest spender on military and warfighting capabilities, as quoted in the abovementioned article.
The uptrend in the Aerospace & Defense industry is also evident from the performance of the S&P Aerospace & Defense Select Industry Index, which has added 54.05% over the past year, surpassing the S&P 500's 15.49% gain in the same period.
Trump Pressure to Push Capex Higher
According to Reuters, U.S. defense giants are ramping up capital expenditure this year, with capital reinvestment anticipated to jump more than 30% this year, following President Trump’s warning to curb dividends and share repurchases in favor of accelerated weapons production.
Per Melius Research, as quoted on the abovementioned Reuters article, five leading U.S. defense firms are projected to lift capital spending to $10.08 billion in 2026 collectively, marking a nearly 38% jump from 2025 levels.
Earnings in Focus
Below, we highlight the fourth-quarter results of a few renowned U.S. Aerospace – Defense industry players.
Lockheed Martin
Lockheed Martin LMT reported fourth-quarter 2025 adjusted earnings of $5.80 per share, which missed the Zacks Consensus Estimate of $6.24 by 7.1%. The bottom line increased 161.3% from the year-ago quarter's reported figure of $2.22. The year-over-year improvement in earnings was primarily driven by higher revenues and operating profit generated in the fourth quarter.
Net sales were $20.32 billion, which beat the Zacks Consensus Estimate of $19.83 billion by 2.5%. The top line also inched up 9.1% from $18.62 billion reported in the year-ago quarter. LMT, the largest U.S. defense contractor by output, reported sales of $75.05 billion in 2025, which were higher than $71.04 billion in 2024. The full-year top-line figure beat the Zacks Consensus Estimate of $74.55 billion.
The company’s backlog as of Dec. 31, 2025, was $193.62 billion compared with $176.04 billion as of Dec. 31, 2024. LMT expects capital expenditure of approximately $2.50-$2.80 billion.
RTX Corporation
RTX Corporation’s RTX fourth-quarter 2025 adjusted earnings per share (EPS) of $1.55 beat the Zacks Consensus Estimate of $1.46 by 5.9%. The bottom line also improved 0.6% from the year-ago quarter’s level of $1.54.
RTX’s fourth-quarter sales totaled $24.24 billion, which surpassed the Zacks Consensus Estimate of $22.74 billion by 6.6%. The top line also surged a solid 12.1% from $21.62 billion recorded for the fourth quarter of 2024. For 2025, the company reported revenues of $88.6 billion compared with $80.74 billion last year.
RTX now expects 2026 adjusted EPS to be in the band of $6.60-$6.80 and 2026 sales to be in the range of $92-$93 billion.
Northrop Grumman
Northrop Grumman NOC reported fourth-quarter 2025 earnings of $7.23 per share, which improved 13.15% from the year-ago quarter, driven by continued robust segment performance, and beat the Zacks Consensus Estimate of $7.0 per share by 3.29%
NOC’s fourth-quarter total sales of $11.71 billion beat the Zacks Consensus Estimate of $11.62 billion by 0.83%. For full-year 2025, organic sales rose 3% to $42.0 billion, supported by robust international growth of 20%.
Strong global demand drove Northrop Grumman’s backlog to a record $95.7 billion in 2025, marking a 4.6% increase from 2024. This sustained demand and record backlog position the company for sustainable long-term growth.
ETFs to Consider
The aerospace and defense industry maintains an optimistic outlook. Given the current geopolitical climate, the trend of rising military spending is likely to persist.
For investors looking to bet on fourth-quarter results as well as the continued surge in military spending, the following Aerospace – Defense ETFs provide a great opportunity.
Investors can consider iShares U.S. Aerospace & Defense ETF ITA, Invesco Aerospace & Defense ETF PPA, SPDR S&P Aerospace & Defense ETF XAR, Global X Defense Tech ETF SHLD, First Trust Indxx Aerospace & Defense ETF MISL and U.S. Global Technology and Aerospace & Defense ETF WAR.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Defense ETFs in Focus: Q4 Earnings & 2026 Spending Boost

Key Points
Kratos stock dropped for a fourth-straight day on Monday.
The company produces popular military hardware, but isn't making a lot of money off of it.
Kratos Defense & Security (NASDAQ: KTOS) stock tumbled 6.3% through 12:30 p.m. ET Monday, its fourth straight day of losses on no obvious bad news. If you ask me, there's only one logical explanation for that:
Kratos stock costs too much.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
What Kratos does
Kratos is one of the best-known producers of military drones right now, a red-hot segment of the defense market. Its marquee products include drones used for target practice, and the XQ-58 Valkyrie Collaborative Combat Aircraft (also known as a "loyal wingman" drone). Both the U.S. Air Force and U.S. Marine Corps are known to have purchased at least a few of the latter for testing, and Kratos is currently partnering with Northrop Grumman (NYSE: NOC) to take the Valkyrie program to the next level.
The company also produces ground systems for satellites and space vehicles, propulsion systems for drones, missiles, loitering munitions, and is actively involved in research and development into hypersonic vehicles and rocket systems.
How much Kratos costs
Space, hypersonics, and drones? Kratos certainly knows how to be in the right place(s) at the right time to meet Pentagon demand for high-technology military hardware. The problem with Kratos stock is that... this fact is pretty well known at this point, and that knowledge has driven Kratos stock to nosebleed levels.
Kratos shares currently trade at nearly 800 times trailing earnings and more than 200 times what the company is expected to earn over the next 12 months. Worse, the "quality" of these earnings is questionable, as they're not supported by positive free cash flow, causing the company to continue burning cash.
No matter how good a company Kratos might be, at its current share price, Kratos stock is a sell for me.
Should you buy stock in Kratos Defense & Security Solutions right now?
Before you buy stock in Kratos Defense & Security Solutions, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kratos Defense & Security Solutions wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $450,256!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,171,666!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of February 2, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kratos Defense & Security Solutions. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Kratos Stock Keeps Going Down

Lockheed Martin Corporation LMT reported fourth-quarter 2025 adjusted earnings of $5.80 per share, which missed the Zacks Consensus Estimate of $6.24 by 7.1%. The bottom line increased 161.3% from the year-ago quarter's reported figure of $2.22.
The year-over-year improvement in earnings was primarily driven by higher revenues and operating profit generated in the fourth quarter of 2025 compared with the prior-year quarter.
LMT reported 2025 adjusted earnings of $21.49 per share, which came in lower than the year-ago figure of $22.31. The bottom-line figure surpassed the Zacks Consensus Estimate of $21.90.
Operational Highlights of Lockheed
Net sales were $20.32 billion, which beat the Zacks Consensus Estimate of $19.83 billion by 2.5%. The top line also inched up 9.1% from $18.62 billion reported in the year-ago quarter.
The year-over-year improvement was driven by higher sales growth registered by LMT’s business segments.
The company reported sales of $75.05 billion in 2025, which were higher than $71.04 billion in 2024. The full-year top-line figure beat the Zacks Consensus Estimate of $74.55 billion.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
LMT’s Backlog
LMT’s backlog as of Dec. 31, 2025, was $193.62 billion compared with $176.04 billion as of Dec. 31, 2024.
The Aeronautics segment accounted for $59.44 billion of the total backlog amount, while the Missiles and Fire Control segment contributed $46.65 billion. The Rotary and Mission Systems segment contributed $47.72 billion, while the Space unit accounted for $39.82 billion.
Lockheed’s Segmental Performance
Aeronautics: Sales increased 6.4% year over year to $8.52 billion. This rise was driven by higher sales volume from the F-35 program.
The segment reported an operating profit of $782 million compared with $434 million in the year-ago quarter. The operating margin expanded 380 basis points (bps) to 9.2%.
Missiles and Fire Control: Quarterly sales improved a solid 17.8% year over year to $4.02 billion. This was on account of higher sales from tactical and strike missile programs.
The segment’s operating profit increased to $535 million against an operating loss of $804 in the prior-year quarter.
Space: The top line improved 7.5% year over year to $3.16 billion, driven by higher sales from strategic and missile defense programs.
The segment’s operating profit increased to $273 million. The operating margin contracted 100 bps to 8.6%.
Rotary and Mission Systems: Quarterly revenues increased 8.3% to $4.62 billion on a year-over-year basis, driven by higher sales from Integrated warfare systems and sensors, Sikorsky helicopter programs and radar programs.
The segment reported an operating profit of $468 million compared with $513 million in the fourth quarter of 2024. The operating margin contracted 190 bps to 10.1%.
Financial Condition of LMT
Lockheed’s cash and cash equivalents totaled $4.12 billion as of Dec. 31, 2025, compared with $2.48 billion at the end of 2024.
Cash from operating activities amounted to $8.56 billion as of Dec. 31, 2025, compared with $6.97 billion a year ago.
Long-term debt as of Dec. 31, 2025, totaled $20.53 billion, up from $19.63 billion as of Dec. 31, 2024.
Lockheed’s 2026 Guidance
Lockheed expects to generate sales in the range of $77.5-$80.0 billion in 2026. The Zacks Consensus Estimate is pegged at $74.20 billion, which lies below the midpoint of the company’s sales guidance.
LMT expects to generate adjusted EPS in the range of $29.35-$30.25. The consensus estimate is currently pegged at $21.86 per share, which lies lower than the company’s newly guided range.
Lockheed expects to generate cash from operations in the range of $9.15-$9.45 billion.
It expects capital expenditure of approximately $2.50-$2.80 billion.
Lockheed expects to generate a free cash flow of approximately $6.50-$6.80 billion.
LMT’s Zacks Rank
LMT currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
The Boeing Company BA incurred an adjusted loss of $1.91 per share in the fourth quarter of 2025, wider than the Zacks Consensus Estimate of a loss of 40 cents. However, the bottom line improved from the year-ago quarter’s reported loss of $5.90 per share.
Revenues amounted to $23.95 billion, which outpaced the consensus estimate of $21.73 billion by 8%. The top line also surged 57.1% from the year-ago quarter’s reported figure of $15.24 billion.
RTX Corporation’s RTX fourth-quarter 2025 adjusted EPS of $1.55 beat the Zacks Consensus Estimate of $1.46 by 5.9%. The bottom line also improved 0.6% from the year-ago quarter’s level of $1.54.
RTX’s fourth-quarter sales totaled $24.24 billion, which surpassed the Zacks Consensus Estimate of $22.74 billion by 6.6%. The top line also surged a solid 12.1% from $21.62 billion recorded for the fourth quarter of 2024.
Northrop Grumman Corporation NOC reported fourth-quarter 2025 adjusted earnings of $7.23 per share, which topped the Zacks Consensus Estimate of $7 by 3.3%. The bottom line also increased 13.1% from $6.39 registered in the prior-year quarter.
NOC’s total sales of $11.71 billion in the fourth quarter beat the consensus estimate of $11.62 billion by 0.8%. The top line also rose 9.6% from $10.69 billion reported in the year-ago quarter.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
See
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Northrop Grumman Corporation

Options Strategies