General Dynamics (GD) closed at $348.96 in the latest trading session, marking a +1.83% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.58% for the day. On the other hand, the Dow registered a gain of 0.05%, and the technology-centric Nasdaq increased by 0.91%.
The defense contractor's shares have seen an increase of 1.17% over the last month, not keeping up with the Aerospace sector's gain of 6.75% and the S&P 500's gain of 4.96%.
The investment community will be closely monitoring the performance of General Dynamics in its forthcoming earnings report. The company is expected to report EPS of $3.93, up 5.08% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $13.43 billion, up 2.97% from the prior-year quarter.
GD's full-year Zacks Consensus Estimates are calling for earnings of $16.58 per share and revenue of $55 billion. These results would represent year-over-year changes of +7.24% and +4.65%, respectively.
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. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.98% higher within the past month. General Dynamics is holding a Zacks Rank of #3 (Hold) right now.
Looking at valuation, General Dynamics is presently trading at a Forward P/E ratio of 20.68. This signifies a discount in comparison to the average Forward P/E of 22.74 for its industry.
It's also important to note that GD currently trades at a PEG ratio of 2.13. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Aerospace - Defense industry stood at 1.56 at the close of the market yesterday.
The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 107, putting it in the top 44% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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).