General Dynamics GD is a major aerospace and defense company with operations across combat systems, marine systems, technologies and business aviation. Its steady flow of new contracts and growing global presence are expected to support its performance in the coming years.
However, this Zacks Rank #3 (Hold) stock faces risks from supply-chain disruptions, tariff pressures and labor shortages that could affect near-term results.
GD’s Tailwinds
General Dynamics continues to win new contracts across its defense and technology businesses, reflecting solid demand from the United States and international customers. Significant awards won by GD in the last reported quarter included a $15.4 billion contract for continued design and support work on the Columbia-class submarines program.
In the fourth quarter of 2025, the company received two contracts for more than $4 billion for its EAGLE tactical vehicles from Germany. The company also received contracts worth $600 million for its bridges from Norway and the United Kingdom. Moreover, the company received a contract worth $640 million for its light armored vehicles and additional logistics vehicles from Canada.
Proposed increases in U.S. defense spending may further support growth, especially for its Marine Systems unit.
Headwinds for GD
General Dynamics continues to face supply-chain challenges, including shortages of important aircraft parts. These issues may delay product deliveries and affect revenue growth in the near term. Tariffs on materials such as steel and aluminum could increase production costs and create pressure on manufacturing schedules, particularly for its Gulfstream aircraft business.
Moreover, labor shortages in the aerospace and defense industry remain a concern. An aging workforce and high employee turnover may impact timely project completion and overall operating performance.
GD Stock’s Price Performance
Shares of GD have gained 25.3% in the past year compared with the industry’s 1.4% growth.
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Stocks to Consider
Some better-ranked stocks from the same sector are Heico HEI, Woodward WWD and Teledyne Technologies TDY. HEI currently sports a Zacks Rank #1 (Strong Buy). WWD and TDY carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heico delivered an average earnings surprise of 13.82% in the last four quarters. The consensus estimate for HEI’s fiscal 2026 earnings stands at $5.74 per share, which suggests year-over-year growth of 17.1%.
Woodward delivered an average earnings surprise of 16.97% in the last four quarters. The Zacks Consensus Estimate for WWD’s fiscal 2026 earnings is pinned at $9.34 per share, which indicates year-over-year growth of 35.6%.
Teledyne Technologies delivered an average earnings surprise of 4.69% in the last four quarters. The consensus estimate for TDY’s 2026 earnings is pegged at $24.01 per share, which implies year-over-year growth of 9.2%.
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General Dynamics Corporation (GD): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).