Is Northrop Grumman Corp. overvalued or undervalued?

As of 22 July 2025, the valuation grade for Northrop Grumman Corp. has moved from fair to attractive, indicating a positive shift in its valuation outlook. The company appears to be undervalued based on its strong financial metrics, including a P/E ratio of 19, a PEG ratio of 0.24, and an EV to EBITDA ratio of 15.82. In comparison to peers, RTX Corp. has a higher P/E of 37.08, while General Dynamics Corp. shows an attractive valuation with a P/E of 36.68.
Despite recent stock performance showing a decline of 1.58% over the past week compared to a 1.05% gain in the S&P 500, Northrop Grumman has delivered a solid year-to-date return of 22.26%, outperforming the S&P 500's 12.22%. This performance, combined with its attractive valuation ratios, supports the conclusion that Northrop Grumman is currently undervalued in the market.