The defense sector has been outperforming quietly, and Northrop Grumman is beginning to separate itself from the pack. The stock just broke above a major resistance level as investors are starting to price in the value of its record backlog, improving cash flow and exposure to the highest-priority areas of U.S. defense spending. Northrop is tied directly to some of the most strategic programs in the Pentagon budget: Sentinel, B-21 Raider, missile defense, the F-35 program and advanced sensors. With management raising 2026 sales and adjusted EPS guidance, the breakout looks like a meaningful technical confirmation of improving fundamentals. Trade timing & outlook NOC recently broke above the $570 resistance level , confirming a bullish reversal from its recent base. Breakout confirmation: The broke out above $570 on strong volume, suggesting potential institutional accumulation. Relative strength improving: NOC has begun outperforming the S & P 500, a notable shift after months of sideways-to-neutral price action. Upside target: A sustained move above $570 opens the path toward $625 first, with a longer-term upside objective near $690. Fundamentals Northrop trades at a discount to the defense peer group despite stronger margins and exceptional backlog visibility. The stock's valuation discount reflects slower near-term growth versus the industry, but that misses the quality of Northrop's revenue base. A record $105 billion backlog, priority-program exposure and improving free cash flow give the company a much stronger visibility profile than the headline growth rates imply. Bullish thesis Record Backlog Provides multi-year visibility: Northrop's backlog reached roughly $105 billion after $20 billion in Q2 net awards, including major wins tied to Sentinel, restricted programs, F-35, missile defense and MESA. Defense spending priorities: Northrop is positioned directly in strategic deterrence, long-range strike, missile defense, space and restricted programs. These are among the areas most likely to receive durable funding support in a more geopolitically unstable world. Cash flow is inflecting: Operating cash flow rose 47% year over year to $1.28 billion, while adjusted free cash flow increased 54% to $978 million. Guidance raise confirms strength: Management raised 2026 sales guidance to $43.75–$44.25 billion and adjusted EPS guidance to $28.60–$29.10, signaling that demand and execution remain stronger than previously expected. Options Trade To express a bullish view with defined risk, consider Buying the Sept. 18, 2026 $585 / $625 Call Vertical @ $14.30 Debit. This entails: Buying the Sept. 18, 2026 $585 Call Selling the Sept. 18, 2026 $625 Call Maximum Risk: $1,430 per contract if NOC is below $585 at expiration Maximum Reward: $2,570 per contract if NOC is at or above $625 at expiration Breakeven: $599.30 This structure targets continuation from the breakout while limiting downside risk if the stock fails to hold above $570. View this trade on OptionsPlay for updated pricing . Summary Northrop Grumman is breaking out at a time when its fundamentals are improving and its strategic relevance is increasing. The company's record backlog, exposure to priority defense programs, raised guidance and improving cash flow all support the case for further upside. With NOC clearing $570 on strong volume and beginning to outperform the broader market, the setup favors a move toward $625 initially and potentially $690 over time. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.