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Valued at a market cap of $71.8 billion, General Dynamics Corporation (GD) is a global leader in aerospace and defense, specializing in high-end design, engineering, and manufacturing to deliver cutting-edge solutions. The company combines strategic investments, next-generation technology development, and strategic acquisitions to meet evolving customer needs worldwide. The Reston, Virginia-based company is expected to release its fiscal Q4 earnings results on Wednesday, Jan. 22.
Ahead of this event, analysts project the defense contractor to report a profit of $4.30 per share, an 18.1% year-over-year growth from $3.64 per share in the year-ago quarter. However, the company has missed Wall Street's bottom-line estimates in the last four quarters. In the most recent quarter, GD missed the consensus EPS estimate by 5.4%.
For fiscal 2024, analysts forecast GD to report EPS of $13.82, up nearly 15% from $12.02 in fiscal 2023. Moreover, EPS is expected to grow 15.5% year-over-year to $15.96 in fiscal 2025.
Over the past 52 weeks, General Dynamics has risen 1.8%, underperforming the broader S&P 500 Index's ($SPX) 25.8% gain and the Industrial Select Sector SPDR Fund's (XLI) 18.6% increase over the same period.
Shares of General Dynamics fell marginally on Oct. 23 due to the company’s Q3 EPS of $3.35, which missed the consensus estimate. Additionally, total revenue of $11.7 billion fell short of the consensus estimate, despite a 10.4% year-over-year increase. The Combat Systems segment also reported a decline in revenues to $2.2 billion, while cash flow from operating activities dropped significantly to nearly $ billion in the prior year. These factors, combined with a smaller-than-expected backlog increase, led to a marginal dip in the stock price.
Analysts' consensus view on General Dynamics stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 21 analysts covering the stock, 11 suggest a "Strong Buy," one gives a "Moderate Buy," eight recommend a "Hold," and one provides a "Strong Sell" rating. This configuration is less bullish than three months ago, with 15 analysts suggesting a "Strong Buy."
As of writing, GD is trading below the average analyst price target of $321.89.
