Ducommun (DCO) Valuation: Legal Settlement Removes Overhang, What’s Next for the Aerospace Supplier?

Ducommun (NYSE:DCO) has finalized a binding settlement to resolve litigation related to the 2020 fire at its Guaymas, Mexico facility. This agreement eliminates a major legal overhang and provides much-needed clarity for investors.

See our latest analysis for Ducommun.

With this legal cloud finally lifted, Ducommun's share price has reflected a surge of renewed investor confidence, jumping 48.3% year-to-date and delivering a one-year total shareholder return of 45.9%. That momentum has been building over the past three years, with total returns soaring 123%, far outpacing broader benchmarks and underlining the market’s conviction in the company’s long-term outlook as aerospace demand slowly recovers.

If you’re interested in discovering what else is taking off in the aerospace and defense sector, check out See the full list for free.

After such an extraordinary run, the key question for investors is whether Ducommun’s current valuation still offers room for upside or if recent gains mean the market has already priced in future growth potential.

Most Popular Narrative: 11% Undervalued

Ducommun's widely followed narrative points to a fair value ($106.25) significantly higher than the last close ($94.31), suggesting compelling upside remains. This view is not just about recent momentum but relies on several catalysts poised to shape the company’s growth through 2028.

Elevated global defense spending and the replenishment of missile and radar inventories, highlighted by strong double-digit growth in both segments and a 30% increase in missile backlog, positions Ducommun to sustain and expand revenue as defense modernization accelerates over the next several years, with increasing program content and order activity.

Read the complete narrative.

Want to know the key assumptions powering this ambitious valuation? The secret lies in a projected earnings surge and profit margins typically reserved for industry leaders. Intrigued by how analysts see Ducommun’s financial future unfolding? Explore the full narrative to uncover the bold projections at the heart of this price target.

Result: Fair Value of $106.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent volatility in aerospace demand and the company's growing reliance on defense contracts could quickly shift the outlook for Ducommun's future growth.

Find out about the key risks to this Ducommun narrative.

Build Your Own Ducommun Narrative

If you’d rather dig into the numbers and draw your own conclusions, it’s easy to build a custom narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Ducommun.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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