UK Markets closed

General Dynamics (GD) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, General Dynamics (GD) closed at $183.55, marking a +0.65% move from the previous day. This change lagged the S&P 500's 0.91% gain on the day. Elsewhere, the Dow gained 1.22%, while the tech-heavy Nasdaq added 1%.

Prior to today's trading, shares of the defense contractor had lost 0.32% over the past month. This has lagged the Aerospace sector's gain of 0.88% and the S&P 500's gain of 1.65% in that time.

GD will be looking to display strength as it nears its next earnings release. On that day, GD is projected to report earnings of $3.46 per share, which would represent year-over-year growth of 12.7%. Our most recent consensus estimate is calling for quarterly revenue of $10.60 billion, up 2.12% from the year-ago period.

GD's full-year Zacks Consensus Estimates are calling for earnings of $11.92 per share and revenue of $39.19 billion. These results would represent year-over-year changes of +6.24% and +8.27%, respectively.

Investors should also note any recent changes to analyst estimates for GD. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% higher. GD is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, GD currently has a Forward P/E ratio of 15.3. This represents a discount compared to its industry's average Forward P/E of 17.92.

Also, we should mention that GD has a PEG ratio of 1.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Aerospace - Defense industry currently had an average PEG ratio of 2.09 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 45, putting it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GD in the coming trading sessions, be sure to utilize Zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
General Dynamics Corporation (GD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research