A Look at General Dynamics’s Valuation After Securing $1.7 Billion U.S. Navy Contract

General Dynamics (GD) just landed a $1.7 billion deal through its NASSCO division to build two more John Lewis-class fleet oilers for the U.S. Navy. This agreement extends a growing series of naval contracts and helps ensure steady work for the shipbuilder’s skilled workforce.

See our latest analysis for General Dynamics.

General Dynamics’ latest contract win builds on a string of major deals that have fueled solid share price momentum this year. Despite a modest dip in the last day, the 1-month share price return stands at 4.5%, with an impressive year-to-date gain of 33.9%. Over the last twelve months, long-term holders have seen a 13.6% total shareholder return, and the five-year total return sits at a remarkable 155%. This reflects both steady growth and confidence in the company’s strategic direction.

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With share gains, a healthy contract backlog, and analyst targets not far above the current price, investors now face a key question: is General Dynamics undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 7.8% Undervalued

General Dynamics’ widely followed narrative puts its fair value at $379, about 8% higher than its recent close of $349. With this premium, a key driver stands out and shapes expectations for the coming years.

The analysts have a consensus price target of $336.0 for General Dynamics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $370.0, and the most bearish reporting a price target of just $280.0.

Read the complete narrative.

Curious what sets this valuation apart from the rest of the sector? There is a unique blend of projected earnings, shrinking share count and expanding margins that makes this fair value truly stand out. See how the narrative’s bullish scenario lines up key numbers for the next few years. Want to uncover the full story and the assumptions behind it? The complete narrative has the answers.

Result: Fair Value of $379 (UNDERVALUED)

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

However, persistent supply chain delays or a sharp shift in technology preferences could put pressure on margins and challenge the company’s long-term earnings trajectory.

Find out about the key risks to this General Dynamics narrative.

Build Your Own General Dynamics Narrative

If you have another perspective or want to examine the details yourself, you can easily build your own view of General Dynamics in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding General Dynamics.

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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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