Northrop Grumman Added to Goldman’s “Conviction Sell” List on Defense Spending Concerns (NOC)


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Defense contractor Northrop Grumman Corporation ( NOC ) saw its shares added to Goldman Sachs' "Conviction Sell" List on Monday.

The firm also cut its price target on NOC from $52 to $48, citing an unfavorable defense spending climate. That new target represents a potential 13% downside to the stock's Friday closing price of $55.45.

A Goldman analyst commented, "In the past two months we have heard the Secretary of Defense, other members of the Administration, and a Defense panel commissioned by Congress provide comments that suggest lower Defense spending."

Northrop Grumman shares were mostly flat in premarket trading Monday.

The Bottom Line
We have avoided shares of NOC since our early June 2008 coverage began, when the stock was trading at $71.70. The company has a dividend yield of 3.39%, based on Friday's closing stock price of $55.45. The stock has technical support in the $50 price area. If the shares can firm up, we see overhead resistance around the $60 price level. We would remain on the sidelines for now.

Northrop Grumman Corporation ( NOC ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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