General Dynamics (GD) Soars 3%: Is Further Upside Left in the Stock?

General Dynamics (GD) shares ended the last trading session 3% higher at $245.29. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.2% gain over the past four weeks.

Shares of General Dynamics have been rallying over the past couple of trading sessions, ever since the company announced the news of its dividend hike on March 2. Notably, this shipbuilder’s board of directors has approved a 5.9% hike in the company’s annual dividend.

This defense contractor is expected to post quarterly earnings of $2.53 per share in its upcoming report, which represents a year-over-year change of +2%. Revenues are expected to be $9.08 billion, down 3.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For General Dynamics, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on GD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

General Dynamics belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Lockheed Martin (LMT), closed the last trading session 2.3% higher at $458.15. Over the past month, LMT has returned 14.9%.

For Lockheed, the consensus EPS estimate for the upcoming report has changed -0.4% over the past month to $6.26. This represents a change of -4.6% from what the company reported a year ago. Lockheed currently has a Zacks Rank of #3 (Hold).

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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.