Northrop Grumman (NOC) took a $477 million pre-tax charge related to the B-21 Raider due to increased manufacturing and material costs, causing a sharp reaction from the market, BofA Securities said in a note on Wednesday.

The firm said the market is focusing too much on B-21 and missing the broader strategic value, as the company's strength lies in core defense priorities, including the Sentinel intercontinental ballistic missile, Glide Phase Interceptors, classified space, and electronic warfare.

"We think the market could be missing the forest for the trees," BofA said.

The company is positioned well to benefit from opportunities both domestically, through programs like the Golden Dome initiative, and internationally, due to rising European defense spending and limited local industrial capacity, the firm added.

BofA reduced its price objective on Northrop's stock to $550 from $585 and reiterated its buy rating.

Price: 476.26, Change: +12.18, Percent Change: +2.62