Earnings Update: General Dynamics Corporation (NYSE:GD) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts

The full-year results for General Dynamics Corporation (NYSE:GD) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of US$48b and statutory earnings per share of US$13.63. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for General Dynamics

Taking into account the latest results, the consensus forecast from General Dynamics' 20 analysts is for revenues of US$50.3b in 2025. This reflects a credible 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.4% to US$14.91. Before this earnings report, the analysts had been forecasting revenues of US$50.3b and earnings per share (EPS) of US$15.92 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$296, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic General Dynamics analyst has a price target of US$350 per share, while the most pessimistic values it at US$231. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the General Dynamics' past performance and to peers in the same industry. It's clear from the latest estimates that General Dynamics' rate of growth is expected to accelerate meaningfully, with the forecast 5.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.9% per year. So it's clear that despite the acceleration in growth, General Dynamics is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for General Dynamics. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that General Dynamics' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for General Dynamics going out to 2027, and you can see them free on our platform here..

You can also view our analysis of General Dynamics' balance sheet, and whether we think General Dynamics is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.