NEW YORK (TheStreet) -- Northrop Grumman (NOC) shares are up 3.5% to $144.75 in early market trading on Friday after the defense contractor was upgraded to Goldman Sachs' "conviction buy" list by analysts at the firm who also raised the company's price target to $165 from $163.
The firm believes that the company's position as the Pentagon's largest subcontractor in the Pentagon's Joint Strike Fighter program makes it a premium buy.
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The price tag of the F-35 Joint Strike Fighter program has ballooned over the years with estimates in August putting the total cost of producing the aircraft at $399 billion with another trillion dollars expected to be needed to maintain the planes.
Under pressure from the U.S. government, main contractor Lockheed Martin (LMT) has engaged in attempting to lower the price of the 2,457 jet order with a goal of a price tag of $80 million per jet.
TheStreet Ratings team rates NORTHROP GRUMMAN CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NORTHROP GRUMMAN CORP (NOC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."