General Dynamics (GD) Dips More Than Broader Market: What You Should Know

In the latest trading session, General Dynamics (GD) closed at $371.35, marking a -2.1% move from the previous day. This change lagged the S&P 500's daily loss of 0.33%. Elsewhere, the Dow saw a downswing of 0.7%, while the tech-heavy Nasdaq depreciated by 0.12%.

The stock of defense contractor has fallen by 1.07% in the past month, leading the Aerospace sector's loss of 6.28% and undershooting the S&P 500's gain of 3.87%.

The upcoming earnings release of General Dynamics will be of great interest to investors. The company's upcoming EPS is projected at $4.13, signifying a 6.44% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.63 billion, up 5.58% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $16.88 per share and a revenue of $55.73 billion, indicating changes of +9.18% and +6.06%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for General Dynamics. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.7% higher. Right now, General Dynamics possesses a Zacks Rank of #3 (Hold).

From a valuation perspective, General Dynamics is currently exchanging hands at a Forward P/E ratio of 22.48. This signifies no noticeable deviation in comparison to the average Forward P/E of 22.48 for its industry.

It's also important to note that GD currently trades at a PEG ratio of 2.2. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. GD's industry had an average PEG ratio of 1.6 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. This industry, currently bearing a Zacks Industry Rank of 150, finds itself in the bottom 40% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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