General Dynamics (GD) Dips More Than Broader Markets: What You Should Know

General Dynamics (GD) closed the most recent trading day at $216.01, moving -0.25% from the previous trading session. This change lagged the S&P 500's daily loss of 0.13%. Elsewhere, the Dow lost 0.15%, while the tech-heavy Nasdaq added 0.14%.

Heading into today, shares of the defense contractor had lost 1.49% over the past month, lagging the Aerospace sector's gain of 1.84% and outpacing the S&P 500's loss of 3.32% in that time.

Investors will be hoping for strength from General Dynamics as it approaches its next earnings release. The company is expected to report EPS of $2.72, up 4.21% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $9.42 billion, up 2.22% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.16 per share and revenue of $39.5 billion. These totals would mark changes of +5.28% and +2.68%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for General Dynamics. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.07% lower within the past month. General Dynamics is currently a Zacks Rank #3 (Hold).

Digging into valuation, General Dynamics currently has a Forward P/E ratio of 17.81. Its industry sports an average Forward P/E of 16.88, so we one might conclude that General Dynamics is trading at a premium comparatively.

Investors should also note that GD has a PEG ratio of 1.81 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Aerospace - Defense stocks are, on average, holding a PEG ratio of 1.99 based on yesterday's closing prices.

The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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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