General Dynamics Corporation (NYSE:GD) Just Released Its Yearly Earnings: Here's What Analysts Think

It's been a good week for General Dynamics Corporation (NYSE:GD) shareholders, because the company has just released its latest full-year results, and the shares gained 5.9% to US$266. General Dynamics reported in line with analyst predictions, delivering revenues of US$42b and statutory earnings per share of US$12.02, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be 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$46.5b in 2024. This reflects a decent 10.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 21% to US$14.69. Before this earnings report, the analysts had been forecasting revenues of US$45.9b and earnings per share (EPS) of US$15.04 in 2024. 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 minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$286, 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. Currently, the most bullish analyst values General Dynamics at US$345 per share, while the most bearish prices it at US$234. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await General Dynamics shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that General Dynamics' rate of growth is expected to accelerate meaningfully, with the forecast 10.0% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect General Dynamics to grow faster than the wider industry.

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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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. We have estimates - from multiple General Dynamics analysts - going out to 2026, 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.

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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.