General Dynamics NASSCO awarded $1.7 billion for two Navy oilers

SAN DIEGO - General Dynamics NASSCO has been awarded a $1.7 billion contract to construct two additional John Lewis-class fleet replenishment oilers for the U.S. Navy, the company announced Monday. Parent company General Dynamics (NYSE:GD), currently trading at $349.49, has seen its shares surge nearly 29% over the past six months and is considered slightly undervalued according to InvestingPro Fair Value estimates.

The contract covers the construction of the T-AO 215 and T-AO 216 vessels, which are part of NASSCO’s existing multi-ship agreement with the Navy for up to eight additional oilers (T-AO 214 through 221).

"The T-AO program holds significant importance to the men and women of NASSCO and is one we take great pride in — it’s the longest running Navy production series in NASSCO history," said Dave Carver, president of General Dynamics NASSCO, in a press release statement.

The John Lewis-class vessels are designed to transfer fuel to Navy ships at sea. Each 742-foot vessel has a full load displacement of 49,850 tons and can carry 162,000 barrels of oil along with dry cargo. The ships can travel at speeds up to 20 knots and have aviation capabilities.

NASSCO is currently under contract to build 17 of the Navy’s planned 20 oilers and has delivered four vessels to date. Five additional oilers are currently under construction at NASSCO’s shipyard.

The Navy initially awarded NASSCO a contract in 2016 to design and build the first six ships in the John Lewis-class. The contract was modified in 2022 to add three more oilers (T-AO 211-213), followed by an additional eight-ship contract in 2024.

General Dynamics NASSCO specializes in the design and construction of Navy and commercial ships and provides repair services for the U.S. Navy. It operates facilities in San Diego, California; Norfolk, Virginia; Mayport, Florida; and Bremerton, Washington. NASSCO is a business unit of General Dynamics (NYSE:GD).With a market capitalization of $94.3 billion, General Dynamics has maintained dividend payments for 47 consecutive years, currently offering a 1.73% yield. The company reported 11.86% revenue growth in the last twelve months and trades at a P/E ratio of 22.65. InvestingPro identifies GD as a prominent player in the Aerospace & Defense industry with relatively low price volatility (Beta: 0.4). For deeper insights into GD’s financial health and 10+ additional ProTips, access the comprehensive Pro Research Report available for this and 1,400+ other U.S. equities on InvestingPro.

In other recent news, General Dynamics Corporation reported strong financial results for the third quarter of 2025, with earnings per share reaching $3.88, surpassing the consensus estimate of $3.71. The company’s revenue for the quarter was $12.9 billion, exceeding analyst expectations of $12.52 billion. Following these impressive results, Bernstein raised its price target for General Dynamics from $335 to $388, maintaining a Market Perform rating. UBS also adjusted its price target to $381 from $369, citing solid performance in the Marine and Aerospace segments as key growth drivers.

Additionally, Vertical Research Partners upgraded General Dynamics’ stock from Hold to Buy, setting a new price target of $400, reflecting confidence in the company’s continued strong performance. Meanwhile, Innodata Inc. announced leadership changes aimed at bolstering its growth in generative AI solutions. Rahul Singhal has been promoted to President and Chief Revenue Officer, taking on expanded responsibilities in product strategy and market execution. These developments highlight significant strategic moves and financial achievements for both companies.

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