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    Reassessing General Dynamics (GD) Valuation After Strong Multi Year Returns And Backlog Support

    Simply Wall St·01/07/2026 16:31:29
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    General Dynamics (GD) has drawn fresh attention as investors reassess major defense and aerospace names, with the stock recently closing at $360.71 after a year that included double digit total returns.

    See our latest analysis for General Dynamics.

    The recent move in General Dynamics' share price, including a 6.9% 1 month share price return and a 5.0% year to date share price return, sits alongside a 41.8% 1 year total shareholder return and 162.8% 5 year total shareholder return. This points to momentum that has been building over time rather than fading.

    If you are assessing General Dynamics, it can also help to see what else is happening across aerospace peers, including aerospace and defense stocks as another way to spot ideas in this space.

    With General Dynamics posting solid recent returns and trading at a small discount to some analyst and intrinsic estimates, the key question now is whether there is still mispricing here or if the market is already factoring in future growth.

    Most Popular Narrative: 5.5% Undervalued

    With General Dynamics last closing at $360.71 against a narrative fair value of about $381.86, the current setup revolves around solid orders and future earnings power.

    Robust multi year order intake and record backlog driven largely by increased global defense spending and rising geopolitical instability provide strong visibility into future revenue growth across key segments, especially Marine and Aerospace. Accelerating investment in secure communications, IT modernization, and cyber defense solutions is fueling growth in the Mission Systems and GDIT divisions, aligning with increased government and enterprise focus on digital transformation and cyber resilience, which is expected to support margin and earnings expansion as these mix shifts take hold.

    Read the complete narrative.

    Want to see what is behind that confidence in future earnings power? The narrative leans on measured revenue growth, higher margins, and a richer earnings multiple. Curious which assumptions really move that fair value line?

    Result: Fair Value of $381.86 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, there are still pressure points to watch, including execution risk on complex Marine and Technology programs and potential contract delays that could challenge margin and earnings assumptions.

    Find out about the key risks to this General Dynamics narrative.

    Build Your Own General Dynamics Narrative

    If you look at the numbers and come to a different conclusion, or just prefer your own work, you can build a custom view in minutes with Do it your way.

    A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding General Dynamics.

    Looking for more investment ideas?

    If you want to keep building on your work with General Dynamics, the next step is widening your field of view to other focused opportunities.

    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.