Price to Earnings (P/E)
since 2005
Calculation
Northrop Grumman Corp., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net earnings (loss)1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan 26, 2023 | 13.86 | = | 443.47 | ÷ | 31.99 | 31.99 | = | 4,896 | ÷ | 153,053,371 | |
| Jan 27, 2022 | 8.33 | = | 373.99 | ÷ | 44.87 | 44.87 | = | 7,005 | ÷ | 156,101,934 | |
| Jan 28, 2021 | 15.32 | = | 293.03 | ÷ | 19.13 | 19.13 | = | 3,189 | ÷ | 166,718,384 | |
| Jan 30, 2020 | 28.70 | = | 384.87 | ÷ | 13.41 | 13.41 | = | 2,248 | ÷ | 167,637,130 | |
| Jan 31, 2019 | 14.48 | = | 275.55 | ÷ | 19.02 | 19.02 | = | 3,229 | ÷ | 169,737,507 | |
| Jan 29, 2018 | 29.23 | = | 338.34 | ÷ | 11.57 | 11.57 | = | 2,015 | ÷ | 174,087,585 | |
| Jan 30, 2017 | 18.21 | = | 229.48 | ÷ | 12.60 | 12.60 | = | 2,200 | ÷ | 174,599,406 | |
| Feb 1, 2016 | 17.15 | = | 188.64 | ÷ | 11.00 | 11.00 | = | 1,990 | ÷ | 180,943,220 | |
| Feb 2, 2015 | 15.27 | = | 159.19 | ÷ | 10.43 | 10.43 | = | 2,069 | ÷ | 198,405,799 | |
| Feb 3, 2014 | 12.57 | = | 113.25 | ÷ | 9.01 | 9.01 | = | 1,952 | ÷ | 216,737,248 | |
| Feb 5, 2013 | 7.78 | = | 64.88 | ÷ | 8.34 | 8.34 | = | 1,978 | ÷ | 237,126,501 | |
| Feb 8, 2012 | 7.22 | = | 60.50 | ÷ | 8.38 | 8.38 | = | 2,118 | ÷ | 252,631,776 | |
| Feb 9, 2011 | 10.20 | = | 71.87 | ÷ | 7.05 | 7.05 | = | 2,053 | ÷ | 291,312,990 | |
| Feb 9, 2010 | 10.69 | = | 59.55 | ÷ | 5.57 | 5.57 | = | 1,686 | ÷ | 302,771,417 | |
| Feb 10, 2009 | — | = | 44.54 | ÷ | -3.86 | -3.86 | = | -1,262 | ÷ | 327,180,490 | |
| Feb 20, 2008 | 15.29 | = | 81.00 | ÷ | 5.30 | 5.30 | = | 1,790 | ÷ | 337,919,384 | |
| Feb 21, 2007 | 17.10 | = | 75.29 | ÷ | 4.40 | 4.40 | = | 1,542 | ÷ | 350,262,436 | |
| Feb 17, 2006 | 16.46 | = | 65.71 | ÷ | 3.99 | 3.99 | = | 1,400 | ÷ | 350,705,853 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
A comprehensive analysis of the financial data from 2006 to 2023 reveals a long-term upward trajectory in both share price and earnings per share, though the price-to-earnings (P/E) ratio exhibits significant volatility and cyclicality.
- Share Price and Earnings Performance
- The share price demonstrates substantial long-term growth, ascending from 65.71 US$ in 2006 to 443.47 US$ by 2023. This growth was punctuated by a sharp decline in 2009 to 44.54 US$, coinciding with a period of negative earnings. Earnings per share (EPS) followed a similar growth pattern, rising from 3.99 US$ in 2006 to 31.99 US$ in 2023, despite a severe contraction to -3.86 US$ in 2009 and a peak of 44.87 US$ in 2022.
- P/E Ratio Trend Analysis
- The P/E ratio has fluctuated across three distinct phases. From 2006 to 2008, the ratio remained relatively stable between 15.29 and 17.10. A period of valuation compression occurred between 2010 and 2013, where the ratio declined from 10.69 to a low of 7.22. Starting in 2014, a trend of expansion emerged, leading to higher volatility in the later years of the period.
- Valuation Extremes and Anomalies
- Significant valuation spikes are observed in 2018 (29.23) and 2020 (28.70), indicating periods where the market price increased more rapidly than underlying earnings. Conversely, a sharp contraction to 8.33 occurred in 2022, which is directly attributable to a substantial surge in EPS to 44.87 US$. This suggests that the P/E ratio for the entity is highly sensitive to non-linear swings in annual earnings.
- Long-term Valuation Summary
- Despite the volatility, the P/E ratio has historically oscillated between a floor of approximately 7x and a ceiling of approximately 29x. The most recent data point of 13.86 in 2023 suggests a return to a more moderate valuation level, aligning closely with the historical averages seen in the mid-2000s and mid-2010s.
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Comparison to Competitors
Northrop Grumman Corp., P/E, long-term trends, comparison to competitors
| Northrop Grumman Corp. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Jan 26, 2023 | 13.86 | — | 19.15 | 27.93 | — | 26.97 | 20.48 | 27.59 |
| Jan 27, 2022 | 8.33 | — | 16.82 | 27.77 | — | 23.14 | 16.70 | 36.79 |
| Jan 28, 2021 | 15.32 | — | 36.80 | 37.46 | 19.67 | 29.63 | 13.44 | — |
| Jan 30, 2020 | 28.70 | — | 12.36 | 18.06 | — | 20.97 | 19.87 | 24.41 |
| Jan 31, 2019 | 14.48 | 21.87 | 12.42 | 15.92 | — | 16.02 | 16.88 | 19.74 |
| Jan 29, 2018 | 29.23 | 24.68 | 126.80 | 11.90 | — | 67.20 | 48.70 | 21.97 |
| Jan 30, 2017 | 18.21 | 20.50 | — | 16.96 | 32.22 | 19.29 | 14.14 | 17.55 |
| Feb 1, 2016 | 17.15 | 14.89 | 18.07 | 13.17 | — | 16.70 | 18.36 | 9.31 |
| Feb 2, 2015 | 15.27 | 19.15 | 14.01 | 18.73 | 17.17 | 19.27 | 16.86 | 17.52 |
| Feb 3, 2014 | 12.57 | 21.10 | 16.25 | 19.35 | 19.59 | 18.91 | 17.56 | 17.51 |
| Feb 5, 2013 | 7.78 | 14.71 | 11.02 | 23.99 | 17.57 | 18.78 | 10.34 | 16.07 |
| Feb 8, 2012 | 7.22 | 14.09 | 15.11 | 12.83 | 15.52 | 22.54 | 10.81 | 15.29 |
| Feb 9, 2011 | 10.20 | 16.17 | 24.14 | 19.59 | 19.49 | 22.48 | 9.58 | 17.84 |
| Feb 9, 2010 | 10.69 | 33.40 | 40.66 | 29.60 | 16.09 | 13.44 | 9.56 | 16.33 |
| Feb 10, 2009 | — | 11.63 | 4.51 | 5.65 | 6.62 | 8.71 | 8.47 | 9.57 |
| Feb 20, 2008 | 15.29 | 15.99 | 12.54 | 11.89 | 15.45 | 17.07 | 14.15 | 16.61 |
| Feb 21, 2007 | 17.10 | 32.40 | 12.28 | 12.47 | 17.11 | 18.37 | 16.95 | 18.16 |
| Feb 17, 2006 | 16.46 | 22.62 | 17.17 | 12.82 | 21.07 | 20.71 | 17.45 | 18.76 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Northrop Grumman Corp., P/E, long-term trends, comparison to sector (capital goods)
| Northrop Grumman Corp. | Capital Goods | |
|---|---|---|
| Jan 26, 2023 | 13.86 | 40.21 |
| Jan 27, 2022 | 8.33 | 57.31 |
| Jan 28, 2021 | 15.32 | 123.55 |
| Jan 30, 2020 | 28.70 | 39.03 |
| Jan 31, 2019 | 14.48 | 56.00 |
| Jan 29, 2018 | 29.23 | 55.16 |
| Jan 30, 2017 | 18.21 | 23.62 |
| Feb 1, 2016 | 17.15 | 33.10 |
| Feb 2, 2015 | 15.27 | 17.47 |
| Feb 3, 2014 | 12.57 | 18.85 |
| Feb 5, 2013 | 7.78 | 15.74 |
| Feb 8, 2012 | 7.22 | 15.20 |
| Feb 9, 2011 | 10.20 | 18.46 |
| Feb 9, 2010 | 10.69 | 17.22 |
| Feb 10, 2009 | — | 7.48 |
| Feb 20, 2008 | 15.29 | 15.28 |
| Feb 21, 2007 | 17.10 | 17.63 |
| Feb 17, 2006 | 16.46 | 20.11 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Northrop Grumman Corp., P/E, long-term trends, comparison to industry (industrials)
| Northrop Grumman Corp. | Industrials | |
|---|---|---|
| Jan 26, 2023 | 13.86 | 36.06 |
| Jan 27, 2022 | 8.33 | 35.59 |
| Jan 28, 2021 | 15.32 | — |
| Jan 30, 2020 | 28.70 | 43.95 |
| Jan 31, 2019 | 14.48 | 33.70 |
| Jan 29, 2018 | 29.23 | 29.83 |
| Jan 30, 2017 | 18.21 | 22.92 |
| Feb 1, 2016 | 17.15 | 22.89 |
| Feb 2, 2015 | 15.27 | 18.79 |
| Feb 3, 2014 | 12.57 | 19.13 |
| Feb 5, 2013 | 7.78 | 17.77 |
| Feb 8, 2012 | 7.22 | 15.75 |
| Feb 9, 2011 | 10.20 | 18.72 |
| Feb 9, 2010 | 10.69 | 19.17 |
| Feb 10, 2009 | — | 9.73 |
| Feb 20, 2008 | 15.29 | 16.93 |
| Feb 21, 2007 | 17.10 | 11.65 |
| Feb 17, 2006 | 16.46 | 50.62 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).