Using the PEG framework with analyst consensus forward EPS growth of 8.0% plus 1.3% dividend yield, Northrop Grumman Corporation has a fair value of $223.96 based on NTM EPS (FY2026) of $28.00. The current PEG ratio is 4.16.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 4.7% |
| Dividend Yield | +1.3% |
| Adjusted Growth (clamped 8–25%)Clamped | 8.0% |
| Fair P/E | 8.0x |
| NTM EPS (FY2026) | $28.00 |
| Fair Value | $223.96 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $29.08 | — | — |
| FY2026E | $28.00 | -3.7% | 16 |
| FY2027E | $30.12 | +7.6% | 16 |
| FY2028E | $32.31 | +7.3% | 14 |
| FY2029E | $34.04 | +5.3% | 9 |
| FY2030E | $36.50 | +7.2% | 13 |
5Y Forward EPS CAGR: 4.7%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.
| Year | Net Income | EPS | YoY |
|---|
| FY2021 | $7.0B | $43.54 | — |
| FY2022 | $4.9B | $31.47 | -27.7% |
| FY2023 | $2.1B | $13.53 | -57.0% |
| FY2024 | $4.2B | $28.34 | +109.5% |
| FY2025 | $4.2B | $29.08 | +2.6% |
4Y Historical EPS CAGR: -9.6%