Analysts at Credit Suisse on Monday changed their EPS estimates for Northrop Grumman ( NYSE: NOC ) because of narrower margins on building the B-21 stealth bomber, whose prototype was revealed to the public in December.
The bank lowered its estimates for Northrop’s ( NOC ) earnings before interest and taxes from 2023 to 2025, “as we build out a more detailed aeronautics EBIT model and further blend down B-21 margins,” Scott Deutsche, analyst at Credit Suisse, said in a February 6 report.
Credit Suisse cut its price target for Northrop ( NOC ) to $490 a share from $500 based on the lower earnings estimates.
When reporting Q4 results last month, Northrop ( NOC ) said its operating margin rate increased to 10.5% from 8.4%, mostly because of higher net estimate at completion (EAC) adjustments. Those included a $66 million positive adjustment, largely from incentives for the engineering, manufacturing and development (EMD) phase of the B-21.
Credit Suisse's estimates for Northrop Grumman ( NOC ), Feb. 6 | |||
EPS | |||
New | Old | ||
2023 | $22.07 | $22.05 | |
2024 | $23.95 | $24.33 | |
2025 | $26.95 | $27.72 |
B-21 Raider; photo: U.S. Air Force
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Northrop Grumman’s EPS estimates revised at Credit Suisse on B-21 margins