General Dynamics (GD) closed at $341.50 in the latest trading session, marking a +1.32% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 0.41%. Elsewhere, the Dow saw an upswing of 1.73%, while the tech-heavy Nasdaq depreciated by 0.09%.
The defense contractor's stock has dropped by 2.95% in the past month, falling short of the Aerospace sector's gain of 3.61% and the S&P 500's gain of 4.59%.
The investment community will be paying close attention to the earnings performance of General Dynamics in its upcoming release. It is anticipated that the company will report an EPS of $3.93, marking a 5.08% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $13.43 billion, indicating a 2.97% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $16.58 per share and a revenue of $55 billion, representing changes of +7.24% and +4.65%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for General Dynamics. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, there's been a 0.37% rise in the Zacks Consensus EPS estimate. 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 20.33. This valuation marks a discount compared to its industry average Forward P/E of 22.31.
We can additionally observe that GD currently boasts a PEG ratio of 2.1. 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. As of the close of trade yesterday, the Aerospace - Defense industry held an average PEG ratio of 1.53.
The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 92, putting it in the top 38% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).