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

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General Dynamics (GD) closed at $231.36 in the latest trading session, marking a -1.79% move from the prior day. This change lagged the S&P 500's daily loss of 1.08%. Elsewhere, the Dow lost 0.81%, while the tech-heavy Nasdaq added 0.22%.

Coming into today, shares of the defense contractor had gained 2.74% in the past month. In that same time, the Aerospace sector gained 2.42%, while the S&P 500 gained 1.03%.

General Dynamics will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.73, up 4.6% 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.

GD's full-year Zacks Consensus Estimates are calling for earnings of $12.17 per share and revenue of $39.5 billion. These results would represent year-over-year changes of +5.37% and +2.68%, respectively.

Investors should also note any recent changes to analyst estimates for General Dynamics. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. General Dynamics currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that General Dynamics has a Forward P/E ratio of 19.36 right now. This represents a premium compared to its industry's average Forward P/E of 18.12.

It is also worth noting that GD currently has a PEG ratio of 1.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. GD's industry had an average PEG ratio of 2.19 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 212, which puts it in the bottom 17% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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