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Northrop Grumman Corporation (NOC) – basic stock analysis

Northrop Grumman Corporation is a global aerospace and defense company (Aeronautics Systems, Defense Systems, Mission Systems and Space Systems). It was founded in 1939 and is based in Falls Church, Virginia. Our estimated price for the company is around 374 USD. Extremely negative and positive target price estimates range from 343 to 455 USD.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.27% and -1.23% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.63% and -0.57% . Yesterday’s return was only 0.49% , which is below the first standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and 0 for price indexation. This means that we are in the extreme of a negative short-term phase of the cycle. Both scorings range from -3 up to 3 . The estimated cycles development based on our analytical systems is shown in the following chart.

NOC daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. As we can see in the chart below, only long-term MA is currently in a bullish sentiment. Shorter MAs could be a resistance to market price.

NOC daily price development Source: WALFIR

Our estimated Earnings Power Value (EPV) is 321 USD and the Growth Value (GV) is approximately 413 USD . The potential opportunity for growth is based on the value of EPV and % of reinvested earnings. NAV is represented by the Total Stockholders' equity. The following chart uses the value from the last fiscal year.

NOC value estimation Source: WALFIR

We could use the average long-term ATR (Average True Range) obtained from daily data (1.78% ) to estimate Stop Loss orders for our positions. The current value is 2.15% , which is close to the average. Approximately 90% confidence interval (return between -2.40% and 3.00% ) is shown in the histogram below by a red rectangle.

NOC daily return distribution Source: WALFIR

We could use the last decile of low to high returns (3.50% ) to estimate Profit Targets, as shown in the chart below.

NOC daily low to high distribution Source: WALFIR

The basic technical analysis points to a dynamic decline in the market price at the end of October. However, it is still in an important demand zone (green rectangle), where is also the Fibonacci retracement level of 38.20% , along with a long-term moving average. According to our estimate of intrinsic value, the market price is currently very close to the negative (343 USD – red highlight) scenario. In addition, slightly lower, there is also the Fibonacci retracement level of 50.00% . Higher volumes on Thursday could motivate the bulls.

NOC basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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