September looms as a risk month for stocks, Yardeni says
Investing.com - Jefferies has raised its price target on General Dynamics Corp. (NYSE:GD) to $325.00 from $285.00 while maintaining a Hold rating on the stock. According to InvestingPro data, the defense giant, currently valued at $80 billion, appears undervalued based on its proprietary Fair Value calculations.
The firm expects General Dynamics to report second-quarter earnings per share of $3.67, above the consensus estimate of $3.47, when the company announces results on July 23. The company maintains a "GOOD" financial health score on InvestingPro, with strong profitability metrics and moderate debt levels.
Jefferies projects 5% organic growth for General Dynamics in the second quarter, primarily driven by a 12% increase in the Aerospace segment, which is expected to deliver 39 aircraft compared to 37 in the previous quarter, with additional benefits from price and mix improvements.
The Marine segment is forecast to grow by 4%, while the Combat segment presents potential risk, including a review of the 155mm artillery contract, which represents approximately 10% of the Combat business.
Jefferies anticipates General Dynamics will modestly raise its 2025 earnings guidance to a range of $14.85-14.95 per share from the current $14.75-14.85, based on better top and bottom-line performance in the Aerospace division.
In other recent news, General Dynamics has been awarded a significant $1.85 billion contract modification for the production of Virginia-class submarines. This contract will support the acquisition of essential components that require substantial lead time for manufacturing and delivery, ensuring the ongoing production of nuclear submarines for the U.S. Navy. Additionally, General Dynamics Land Systems secured a $150 million contract for the Abrams Engineering Program, with work expected to be completed by June 2027. The company has also been granted three defense contracts totaling approximately $150 million for various naval and air force projects, including work on the USS Ronald Reagan aircraft carrier and software integration for Navy submarines.
Furthermore, General Dynamics Information Technology received a $580 million task order to sustain force protection systems for U.S. Army bases globally. This contract includes maintaining security systems such as radars, cameras, and sensors to protect military installations and personnel from potential threats. These recent developments highlight General Dynamics’ continued involvement in major defense projects, with funding sourced from various fiscal allocations across the Navy, Army, and Air Force.
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