Northrop Grumman Corporation NOC has recently secured a $100 million contract from the U.S. Navy to support the production and launch operations of the GQM-163A aerial target missile system. The contract was awarded by the Naval Air Warfare Center Weapons Division, Point Mugu, CA.
The contract includes the production and delivery of flight trajectory data and technical support packages for the Ground Launch Drone Missile GQM-163A aerial target system. It also covers the operation, maintenance and loading of GQM-163A targets onto launch systems before launch to support the Navy’s Pacific Target Marine Operations Division.
The majority of the work related to this deal will be carried out in Chandler, AZ; Point Mugu, CA; and Las Cruces, NM. The contract is expected to be completed by May 2031.
What’s Favoring NOC Stock?
According to a report from the Mordor Intelligence firm, rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems in recent times, backed by the rapid development of advanced missile technologies over the last decade. Mordor Intelligence also forecasts that the global missiles and missile defense systems market will witness a compound annual growth rate of 5.58% during the 2026-2031 period.
Such strong growth projections indicate solid opportunities for Northrop Grumman, which develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors. Notably, NOC’s IBCS serves as the centerpiece of the U.S. Army's air and missile defense modernization strategy and thus enjoys a solid demand in the missile and missile defense systems market. The recent contract is an example of that.
Opportunities for Other Defense Stocks
Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below.
RTX Corporation RTX: It is known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.
The company’s long-term (three to five years) earnings growth rate is 10.2%. The Zacks Consensus Estimate for RTX’s 2026 sales indicates year-over-year growth of 5.7%.
The Boeing Company BA: It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.
The Zacks Consensus Estimate for BA’s 2026 sales indicates year-over-year growth of 8.1%. The Zacks Consensus Estimate for BA’s 2026 earnings indicates year-over-year improvement.
Lockheed Martin Corporation LMT: Lockheed Martin’s renowned missile program includes the Patriot Advanced Capability-3 and Terminal High-Altitude Area Defense air and missile defense programs. It also manufactures the Multiple Launch Rocket System, the Joint Air-to-Surface Standoff Missile and Javelin tactical missile programs alongside other tactical missiles.
The company has a long-term earnings growth rate of 18.5%. The Zacks Consensus Estimate for LMT’s 2026 sales indicates year-over-year growth of 5.3%.
NOC Stock’s Price Movement
Shares of NOC have gained 11.4% in the past year compared with the industry’s 0.4% growth.
Image Source: Zacks Investment Research
NOC’s Zacks Rank
NOC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Boeing Company (BA): Free Stock Analysis Report
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
RTX Corporation (RTX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).