GPI win a positive for Northrop Grumman, negative for RTX, says Morgan Stanley

Noting that the U.S. Missile Defense Agency has down-selected Northrop Grumman (NOC) for the Glide Phase Interceptor, or GPI, program, which is intended to deliver a ship-based missile that can defeat hypersonic threats, Morgan Stanley analyst Kristine Liwag called this award a positive and “shot in the arm” for Northrop’s missile defense portfolio after the Next Generation Interceptor, or NGI, loss to Lockheed Martin (LMT) earlier this year. Meanwhile, with the GPI loss, RTX (RTX) is now without prime positions on two key DoD interceptor development programs, the other being NGI, the analyst tells investors. RTX has “historically had a stronghold on ship-based interceptors,” but Northrop’s GPI win “could jeopardize this particular competitive position over time,” adds the analyst, who keeps an Overweight rating and $592 price target on Northrop shares.