General Dynamics stock price target raised to $330 from $315 at RBC Capital

Investing.com - RBC Capital has raised its price target on General Dynamics Corp. (NYSE:GD) to $330.00 from $315.00 while maintaining a Sector Perform rating on the stock. The defense contractor’s stock is currently trading near its 52-week high of $318.77, with an impressive year-to-date return of 22.22%.

The defense contractor reported second-quarter 2025 earnings per share of $3.74, exceeding expectations by 5%, alongside 9% revenue growth compared to the same period last year. The company’s market capitalization now stands at $85 billion, with revenue growth reaching 11.85% over the last twelve months.

General Dynamics’ Marine segment led growth with a 22% increase, driven by recent Virginia-class submarine contracts that contributed to a book-to-bill ratio of 2.2x. The Aerospace division recorded 4% growth with 13.2% margins.

Following these results, General Dynamics has raised its guidance for fiscal year 2025, which RBC Capital notes has improved investor confidence in both the Aerospace division, which saw strong second-quarter bookings, and the defense business.

Despite the positive results, RBC Capital maintained its Sector Perform rating, citing continued headwinds in the defense portfolio and near-term margin challenges in the Aerospace segment due to product mix issues. The stock currently trades at a P/E ratio of 21.01, which InvestingPro data suggests is high relative to near-term earnings growth.

In other recent news, General Dynamics reported impressive second-quarter financial results, with earnings per share of $3.74, surpassing the consensus estimate of $3.55. The company also recorded revenues of $13 billion, exceeding expectations of $12.39 billion. Following these results, General Dynamics raised its guidance, which led Citi to increase its price target for the company from $348 to $368, maintaining a Buy rating. Similarly, Bernstein raised its price target to $335 from $314, while keeping a Market Perform rating. Wolfe Research upgraded General Dynamics to Outperform, citing confidence in the company’s Gulfstream business jet segment and setting a price target of $360.

In addition to financial performance, General Dynamics Electric Boat received a $33.5 million contract modification from the U.S. Department of Defense for submarine maintenance support. This contract extension is for the Nuclear Regional Maintenance Department at Naval Submarine Support Facility New London. These developments indicate a period of robust activity and positive outlooks from analysts for General Dynamics.

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