RTX vs NOC: valuation, earnings beats, and which defense stock offers more value
RTX Corp (RTX) and Northrop Grumman (NOC) both beat earnings estimates and raised guidance. RTX trades at $191.40 with a P/E of 33.2x, while NOC trades at $536.73 with a P/E of 16.9x. Analysts favor NOC for value, citing lower multiples and higher ROIC, while RTX offers stronger growth. Both stocks show upside potential, but market reactions differ.
How this was made
The 30-second read
Why it matters
RTX's higher growth story is priced at a premium, while NOC offers better value; investors may shift allocations based on valuation and backlog strength.
Market read
Fresh earnings data and guidance updates for two major defense stocks provide actionable insight for short‑term positioning.
What to watch
Potential impact of upcoming FY27 budget allocations on NOC's backlog and cash flow.
Background
The article compares RTX and Northrop Grumman after both posted earnings beats on Oct 20, 2026, highlighting valuation metrics and guidance changes.
Ticker impact
RTX reported a 27% EPS beat and raised full-year EPS guidance, but the stock fell after the release.
likely pressure as investors digest the premium valuation and modest guidance lift
Despite a strong earnings beat, the stock slipped pre‑market to -0.37%, indicating limited enthusiasm for the higher guidance at current valuation.
Northrop Grumman posted an EPS beat, raised full‑year EPS guidance and highlighted a record backlog, with the stock up about 5% intraday.
likely upside as investors reward the lower multiple and strong backlog
The earnings beat, guidance lift and a 10% fair‑value upside signal a favorable re‑rating for the stock.
Market effects
Defense sector may see a rotation toward lower‑multiple peers after the earnings contrast.
U.S. defense stocks could experience modest re‑pricing in the near term.
Large‑cap defense makers influence global aerospace and defense supply chains.
Counterpoint
If RTX can sustain its growth trajectory, the premium may be justified despite short‑term weakness.
Key entities
- CompanyRTX Corp
U.S.-listed defense contractor, ticker RTX.
- CompanyNorthrop Grumman
U.S.-listed defense contractor, ticker NOC.
