General Dynamics (GD) Dips More Than Broader Markets: What You Should Know

General Dynamics (GD) closed at $219.28 in the latest trading session, marking a -0.55% move from the prior day. This move lagged the S&P 500's daily loss of 0.07%. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.02%.

Prior to today's trading, shares of the defense contractor had lost 1.97% over the past month. This has was narrower than the Aerospace sector's loss of 3.69% and the S&P 500's loss of 7.99% in that time.

General Dynamics will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.72, up 4.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.42 billion, up 2.22% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.13 per share and revenue of $39.5 billion. These totals would mark changes of +5.02% and +2.68%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for General Dynamics. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.3% lower. General Dynamics is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that General Dynamics has a Forward P/E ratio of 18.18 right now. For comparison, its industry has an average Forward P/E of 17.34, which means General Dynamics is trading at a premium to the group.

Also, we should mention that GD has a PEG ratio of 1.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Aerospace - Defense was holding an average PEG ratio of 2.04 at yesterday's closing price.

The Aerospace - Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.