General Dynamics (GD) closed at $355.95 in the latest trading session, marking a -1.13% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 1.14%. On the other hand, the Dow registered a gain of 0.61%, and the technology-centric Nasdaq increased by 1.69%.
The defense contractor's stock has dropped by 8.24% in the past month, exceeding the Aerospace sector's loss of 14.23% and lagging the S&P 500's loss of 2.85%.
The upcoming earnings release of General Dynamics will be of great interest to investors. The company is predicted to post an EPS of $4.14, indicating a 6.7% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $13.66 billion, reflecting a 5.84% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $16.95 per share and a revenue of $55.8 billion, representing changes of +9.64% and +6.19%, respectively, from the prior year.
Any recent changes to analyst estimates for General Dynamics should also be noted by investors. 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 suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.14% higher. General Dynamics is currently a Zacks Rank #3 (Hold).
From a valuation perspective, General Dynamics is currently exchanging hands at a Forward P/E ratio of 21.16. This represents a discount compared to its industry average Forward P/E of 24.25.
Investors should also note that GD has a PEG ratio of 2.07 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Aerospace - Defense industry stood at 1.64 at the close of the market yesterday.
The Aerospace - Defense industry is part of the Aerospace sector. This industry, currently bearing a Zacks Industry Rank of 154, finds itself in the bottom 38% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).