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General Dynamics (GD) Gains But Lags Market: What You Should Know

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General Dynamics (GD - Free Report) closed the most recent trading day at $217.92, moving +0.94% from the previous trading session. This change lagged the S&P 500's 1.46% gain on the day. At the same time, the Dow added 1%, and the tech-heavy Nasdaq lost 0.17%.

Heading into today, shares of the defense contractor had lost 6.79% over the past month, lagging the Aerospace sector's loss of 3.02% and outpacing the S&P 500's loss of 6.94% in that time.

General Dynamics will be looking to display strength as it nears its next earnings release. In that report, analysts expect General Dynamics to post earnings of $2.73 per share. This would mark year-over-year growth of 4.6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.42 billion, up 2.22% from the year-ago period.

GD's full-year Zacks Consensus Estimates are calling for earnings of $12.17 per share and revenue of $39.5 billion. These results would represent year-over-year changes of +5.37% and +2.68%, respectively.

Any recent changes to analyst estimates for General Dynamics should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. General Dynamics is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, General Dynamics is holding a Forward P/E ratio of 17.75. For comparison, its industry has an average Forward P/E of 16.69, which means General Dynamics is trading at a premium to the group.

We can also see that GD currently has a PEG ratio of 1.81. 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. GD's industry had an average PEG ratio of 2 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 10% 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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