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General Dynamics Corp GD

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Morningstar’s Analysis

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General Dynamics Posts Solid Q2 as Gulfstream Demand Rebounds in Earnest

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat rated General Dynamics posted a strong second quarter as Gulfstream received strong bookings and international sales drove growth in the defense businesses. Sales of $9.2 billion missed FactSet consensus by 0.9%, but earnings per share of $2.61 beat FactSet consensus by about 2.6%. We are decreasing our fair value estimate to $188 per share from $189 due to Morningstar’s assumption of higher U.S. corporate tax rates, though this is partially offset by higher sales assumptions.

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Company Profile

Business Description

General Dynamics is a defense contractor and business jet manufacturer. The firm’s segments include aerospace, combat systems, marine, and technologies. The company’s aerospace segment creates Gulfstream business jets. Combat systems mostly produces land-based combat vehicles, such as the M1 Abrams tank. The marine subsegment creates nuclear-powered submarines, among other things. The technologies segment contains two buisiness units, an IT business that primarily serves the government market and a mission systems business that focuses on products that provide command, control, computers, intelligence, surveillance, and reconnaissance capabilities to the military.

11011 Sunset Hills Road
Reston, VA, 20190
T +1 703 876-3000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 100,700