Northrop Grumman (NOC) is deepening its foothold in the F-35 program through sustained and growing demand for its advanced APG-85 radar system.
The company recently secured a not-to-exceed $123.8 million contract from the U.S. Navy to procure long-lead materials, parts, components, and related production efforts.
The contract supports the manufacture of 67 APG-85 radars intended for use by the Air Force, Marine Corps, and Navy.
Production work will be carried out in Linthicum Heights, MD, with completion expected by February 2031, giving Northrop Grumman multi-year revenue visibility.
The APG-85 radar is engineered to provide advanced sensing and targeting capabilities that allow F-35 pilots to detect and track threats with greater precision.
Continued procurement of the system underscores how critical advanced sensor technology has become as the U.S. military expands and sustains its growing F-35 fleet.
The award further cements Northrop Grumman’s established role as a key supplier of mission-critical systems for one of the Pentagon’s most significant tactical aircraft platforms.
Long-duration production programs like the APG-85 create recurring revenue streams, particularly as additional aircraft roll off assembly lines and existing platforms require upgrades and sustainment support.
Shares of NOC have surged 1.8% over the past three months, outperforming the broader industry, which declined 10.3% during the same period.
The company’s shares are trading at a relative discount, with its forward 12-month Price/Sales ratio sitting at 1.57X compared to the industry average of 2.24X.
The Zacks Consensus Estimate for NOC’s 2026 and 2027 earnings has remained unchanged over the past 60 days, reflecting steady analyst expectations.
NOC currently carries a Zacks Rank of 3, placing it in Hold territory as investors weigh its valuation discount against near-term earnings stability.
Other defense names with meaningful F-35 exposure include Lockheed Martin (LMT), the program’s prime contractor, which continues producing aircraft for both domestic and international customers.
RTX Corporation (RTX) also benefits from F-35 activity through its Pratt & Whitney engine division and Collins Aerospace systems, providing recurring propulsion and avionics opportunities.
With the F-35 remaining central to U.S. tactical airpower strategy, Northrop Grumman’s radar business stands well-positioned to generate consistent long-term growth across future production and sustainment cycles.
