Defense contractors L3Harris Technologies, Inc. (NYSE:LHX) and Northrop Grumman Corp. (NYSE:NOC) are set to report fourth-quarter financial results on Thursday before the opening bell.
Here's a look at what investors and analysts are looking for in the reports.
NOC: Analysts expect Northrop Grumman to report quarterly earnings of $6.35 per share on revenue of $11.01 billion, according to Benzinga Pro. Investors will be watching the revenue figures closely as the company missed the consensus estimate last quarter for the first time in more than two years.
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Truist Securities analyst Michael Ciarmoli recently initiated coverage on Northrop Grumman with a Buy rating and price target of $544. Ciarmoli said U.S. and NATO defense budgets will continue to grow and demand for missiles and munitions will remain robust.
Analyst Seth M. Seifman said Northrop Grumman stands out as a stock poised for a "clean quarter" ahead of its fourth-quarter earnings release.
LHX: L3Harris has seen revenue growth of 7.7% year-over-year and reported gross margins of 26.4% last quarter, outpacing larger competitors like Lockheed Martin and Northrop Grumman. Investors will be watching to see if the trend continues in the fourth quarter.
Three research firms, JPMorgan, Truist Securities and Bernstein, have updated their coverage of L3Harris in January with an average price target of $271.67 and an implied 27.52% upside for the stock.
According to estimates from Benzinga Pro, analysts expect the company to report quarterly earnings of $3.42 per share on revenue of $5.5 billion.
NATO: It’s worth noting that President Trump reportedly considered pulling the U.S. out of NATO during his first term. Last week, he reiterated a call for all NATO members to spend 5% of their GDP on defense, up from the current 2%.
The U.S. provides 16% of NATO’s annual budge, according to Reuters.
LHX, NOC Price Action: According to data from Benzinga Pro, L3Harris shares are down 0.49% at $212.26 and Northrop Grumman shares are down 0.81% at $482.69 at the time of publication Wednesday.
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