Baird analyst Peter Arment raised his price target for Northrop Grumman to $364 from $300 and maintained an Outperform rating ahead of the company's quarterly results. In a research note to investors, Arment says he expects the company's quarter to be "solid" with EPS at least in line with consensus, driven by the OA integration going better than expected, "solid" operating performance and outlays driving higher volumes. The stock should perform favorably with a "clean" earnings report in the near-term as investors shift their focus to 2020, Arment says.

RBC Capital raised the firm's price target on Northrop Grumman to $475 from $450 and keeps a Sector Perform rating on the shares after its Q1 earnings beat. The company's growth was led by Aeronautics, which rose 18% y/y, while its better than expected operating margins of 10.9% was a positive, the analyst tells investors in a research note. Northrop Grumman's free cash flow drain was worse than expected, but the company expects strong Q2 free cash flow for the remainder of the year, the firm added.

Says "pleased with cash performance" in Q1. Expects strong cash generation in Q2. Says "committed" to "strong and growing dividend." Remains "upbeat" on long-term prospects.

Says strong global defense budget outlook; broad portfolio well aligned to customer priorities; robust long-term cash flow outlook. Expects greater than $2B in share repurchases in 2024. Says "laser focused" on performance, driving cost efficiencies in the business. Comments taken from Q1 earnings conference call.

For 2024 sees: Aeronautics Systems sales mid $11B, OM rate mid 9%; Defense Systems sales ~ $6B, OM rate low to mid 12%; Missions Systems sales low to mid $11B, OM rate high 14%; Space Systems sales low to mid $14B, OM rate ~9%; Eliminations ~($2.3B), OM rate high 13%. Prior view: Aeronautics Systems sales low $11B, OM rate mid 9%; Defense Systems sales ~ $6B, OM rate low 12%; Missions Systems sales low to mid $11B, OM rate ~ 15%; Space Systems sales mid to high $14B, OM rate ~9%; Eliminations ~($2.3B), OM rate high 13%. Comments taken from investor presentation slides. Comments taken from investor presentation slides.

Backs FY24 free cash flow view $2.25B-$2.65B.

FY24 consensus $24.65. Backs FY24 revenue view $40.8B-$41.2B, consensus $41.11B.