General Dynamics Corporation (NYSE:GD) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

The second-quarter results for General Dynamics Corporation (NYSE:GD) were released last week, making it a good time to revisit its performance. It was a workmanlike result, with revenues of US$12b coming in 4.1% ahead of expectations, and statutory earnings per share of US$3.26, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for General Dynamics

Taking into account the latest results, the consensus forecast from General Dynamics' 21 analysts is for revenues of US$48.0b in 2024. This reflects an okay 6.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 12% to US$14.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$46.9b and earnings per share (EPS) of US$14.57 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$321, implying that the uplift in revenue is not expected to greatly contribute to General Dynamics's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values General Dynamics at US$345 per share, while the most bearish prices it at US$289. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that General Dynamics' rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.3% 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 2.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that General Dynamics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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.

With that in mind, we wouldn't be too quick to come to a conclusion on General Dynamics. Long-term earnings power is much more important than next year's profits. We have forecasts for General Dynamics going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for General Dynamics that you should be aware of.

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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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