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Defense Spending And IT Modernization Will Define Future Markets

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AnalystConsensusTarget
Not Invested
Published 06 Aug 2024

Update shared on11 Sep 2025

Fair value Increased 0.58%
Previous
AnalystConsensusTarget's Fair Value
US$337.94
3.5% undervalued intrinsic discount
11 Sep
US$326.15
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1Y
6.0%
7D
1.1%

General Dynamics’ analyst price target was modestly raised to $337.94, reflecting strong Q2 results, robust defense order flow, improving Gulfstream G700 deliveries, and sector tailwinds, supporting a slightly higher fair value.


Analyst Commentary


  • Solid Q2 results and strong order flow supporting higher price targets.
  • Continued industry momentum in the aerospace and defense sector.
  • More positive budget trends and expectations for improved investor confidence in sector headwinds.
  • Better EBIT growth versus peers, lower program risk, and more attractive valuation relative to the group.
  • Improved Gulfstream G700 delivery trends driving higher earnings estimates.

What's in the News


  • China has begun restricting the supply of critical minerals, including rare earths, to Western defense companies, potentially delaying production for firms such as General Dynamics, which is now seeking alternative sources (Wall Street Journal).
  • China dominates the global supply for several key minerals, raising risks for defense manufacturers' supply chains as U.S.-China tensions rise (Wall Street Journal).
  • The U.S. defense budget request for next year is flat at $892.6B but includes proposals for higher troop pay and increased spending on high-tech missiles and drones, which could benefit General Dynamics, while ship and fighter jet procurement is set to decline (Reuters).
  • The budget proposal also calls for job cuts in the Navy, which may affect naval contractors such as General Dynamics (Reuters).
  • General Dynamics did not repurchase any shares in the most recent tranche (March 31–June 29, 2025), maintaining the prior buyback total at 83.1 million shares (Key Developments).

Valuation Changes


Summary of Valuation Changes for General Dynamics

  • The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $336.00 to $337.94.
  • The Future P/E for General Dynamics remained effectively unchanged, moving only marginally from 20.91x to 21.03x.
  • The Discount Rate for General Dynamics remained effectively unchanged, moving only marginally from 7.88% to 7.87%.

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.