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UPDATE: J.P. Morgan Raises PT on Northrop Grumman Following Share-Count Reduction Announcement

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In a report published Friday, J.P. Morgan analyst Joseph B. Nadol III reiterated a Neutral rating on Northrop Grumman Corporation (NYSE: NOC), and raised the price target from $68.00 to $70.00.

In the report, Nadol noted, “The announcement that NOC plans to reduce its share-count by 25% by the end of 2015 via share repurchase has two implications. First, we are raising our estimates to reflect higher repurchase volume. We had previously assumed that NOC would devote ~$1.5 bn per year to share repurchases through 2015, and we are now raising that to $2 bn. Our year-end 2015 share count assumption is now ~180 mn. Second, NOC has now made a clear statement about its strategy over the next three years – it intends to return essentially all cash to shareholders and further shrink its equity. Besides LMT's nearly 50% payout ratio (which we believe is likely to rise still higher in September), this is the clearest multi-year strategic statement we have seen among large defense companies, and we think the market will reward this.”

Northrop Grumman Corporation closed on Thursday at $79.02.

Latest Ratings for NOC

DateFirmActionFromTo
Jul 2015JP MorganInitiates Coverage onUnderweight
Jul 2015CitigroupMaintainsBuy
Jul 2015Deutsche BankMaintainsBuy

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Posted-In: J.P. MorganAnalyst Color Price Target Analyst Ratings

 

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