Industrials · Equity Analysis

General Dynamics Corporation (GD) Stock Analysis — Price Target, Strong Buy Rating & DCF Valuation (2026)

By Anton Ladnyi, CFA · ex-Goldman Sachs · ex-J.P. Morgan Published 2026-04-17 Updated 2026-05-30

GD — General Dynamics at ~$343 on ~21x FY2026E EPS ($16.45-16.55 raised) with Q1 2026 revenue +10.3%, FCF +192% of net earnings, book-to-bill 2.0x, $188B TCV backlog, and $15.4B Columbia/Virginia-class sub contract; highest FCF quality and most diversified among US defence primes.

GD Price Target & Rating

GD's grade is Strong Buy, with limited downside risk (CVaR -7.7%), and quality metrics (net margin 8%, ROE 18%). General Dynamics Corporation (GD) trades at $346.82 with a valuation grade of Strong Buy: a trailing P/E of 21.8x at a 1% discount to sector median, net margins of 8.1%, a DCF-implied intrinsic range of $321–$482 suggesting a +16% margin of safety, beta 0.34 (defensive risk profile).

DCF Valuation Range

Key Takeaways

Valuation: Strong Buy grade — P/E 21.8x — DCF range $321–$482 implies +16% margin of safety
Risk: CVaR -7.7% (95th percentile, 1-month) indicates moderate tail exposure; beta of 0.34 amplifies broad market moves in both directions
Strengths: Size 4.0/5, 8% net margin, 18% ROE dominate the factor profile
Catalyst: Q2 2026 book-to-bill sustaining above 1.5x; Columbia-class delivery schedule confirmation; Gulfstream G900 order intake
Bear catalyst: Columbia-class slippage causing revenue recognition deferral; Electric Boat labour stoppage; Gulfstream orders below 20/quarter

GD — Quantitative Snapshot May 2026

RatingStrong Buy

Price$346.82

Why Strong BuyFactor profile supports upside — valuation premium reflects growth expectations

Tail riskCVaR -7.7% over one month at the 95th percentile

DCF range$321–$482 intrinsic range; margin of safety +16%

Best useCore large-cap Industrials holding — not a source of diversified sector exposure

Next watchEarnings delivery consistency and margin trajectory

Quantitative Factor Profile

Value: 3.0 / 5
Quality: 3.0 / 5
Momentum: 3.0 / 5
Volatility: 5.0 / 5
Size: 4.0 / 5

Key Metrics

GD Key Metrics — General Dynamics Corporation 2026
Metric	Value
Current Price	$346.82
P/E Ratio (TTM)	21.8x
Forward P/E	19.1x
PEG Ratio	1.59x
P/S Ratio	1.7
EV/EBITDA	15.4
Beta	0.34
Net Margin	8.1%
ROE	18.0%
Debt/Equity	37.7%
Dividend Yield	1.76%
CVaR (95%, 1M)	-7.7%
Market Cap	$93.8B

Analyst View

Anton Ladnyi, CFA · A.L. Capital Advisory Updated 2026-05-30

Rating Rationale

Investment Thesis

↑ Bull Case

Book-to-bill 2.0x in Q1 2026 ($26.6B orders on $13.5B revenue) — strongest order intake among large-cap primes; Combat Systems trailing 12-month B:B 2.1x
Marine Systems revenue +21% in Q1, operating earnings +26.4%; $15.4B Navy Columbia/Virginia contract modification through 2035 plus $29.2B reconciliation shipbuilding allocation
Q1 operating cash flow $2.2B = 192% of net income — exceptional working capital management vs sector peers
Record Gulfstream deliveries (38 aircraft in Q1 — first-quarter record) with Aerospace segment at 15% operating margin
EPS guidance raised immediately post Q1 to $16.45-16.55 — unusual mid-year raise signals management confidence
$188B total estimated contract value provides 3+ year revenue visibility

↓ Bear Case

Electric Boat (shipbuilding) faces workforce and supply chain bottlenecks that constrain production ramp velocity regardless of contract funding
Columbia-class first-of-class delivery risk: any schedule slippage affects revenue recognition timing
Gulfstream cyclicality: business aviation demand falls sharply in recessions; corporate profitability headwinds would compress Aerospace segment
$8B total debt modest but rising with production ramp investments

What Changes the Rating

↑ Catalyst: Electric Boat workforce targets met and production rate confirmed; Congress passes FY2027 defence budget sustaining shipbuilding allocation

↓ Stop / exit: Columbia-class slippage causing revenue recognition deferral; Electric Boat labour stoppage; Gulfstream orders below 20/quarter

Anton’s personal note

GD is the kind of name I want to own more of, not less. The factor combination is genuinely constructive. What I watch on this name is earnings consistency — specifically whether delivery against consensus is stable or deteriorating. That is usually where the rating gets confirmed or challenged before the price reflects it. The setup that would make me more positive is a quarter that confirms the operating leverage story. The setup that would make me cautious is any signal that consensus estimates are getting ahead of fundamentals.

— Anton Ladnyi, CFA

Earnings History

GD Earnings History — EPS Surprise Rate 2026
Quarter	EPS Est.	EPS Actual	Surprise
Q1 2026	$3.69	$4.10	+11.0% ✓
Q4 2025	$4.11	$4.17	+1.5% ✓
Q3 2025	$3.71	$3.88	+4.6% ✓
Q2 2025	$3.54	$3.74	+5.6% ✓

Quarterly EPS — Estimate vs Actual

Earnings Projections

GD Forward EPS Consensus Estimates 2026
Quarter	EPS Est.	YoY EPS	Analysts
Q2 2026	$3.94	+5.3%	17
Q3 2026	$4.07	+4.9%	17
Q4 2026	~$4.53	+8.6%	19
Q1 2027	~$4.55	+11.0%	20
~ Estimated from annual consensus — not a direct analyst survey

Earnings Projections — Consensus EPS Estimates

GD vs. Sector Peers

GD Peer Valuation Comparison 2026
Ticker	P/E (TTM)	Fwd P/E	Beta	CVaR-95	Net Margin
GD	21.8x	19.1x	0.34	-7.7%	8.1%
LMT	25.7x	16.5x	0.10	-19.5%	6.4%
RTX	33.6x	23.8x	0.30	-12.8%	8.0%
NOC	17.7x	18.7x	-0.11	-21.3%	10.8%
LHX	34.3x	23.1x	0.75	-15.6%	10.4%

DCF Scenario Analysis

Hover each scenario for detail · current price $346.82

▼

Bear Case

$295

-14.9%

Fwd P/E: 17.3x

3.0 revenue CAGR · 17.0 exit multiple

◆

Base Case

$390

+12.5%

Fwd P/E: 22.8x

8.0 revenue CAGR · 21.0 exit multiple

▲

Bull Case

$490

+41.3%

Fwd P/E: 28.7x

13.0 revenue CAGR · 25.0 exit multiple

Pairwise Correlation Matrix

1 of 10 peer pairs correlated above 0.60 — diversification benefit within this cluster is structurally limited.

Extended Analysis — Buy, Hold or Sell? Risk Factors. Portfolio Fit.

Is GD a buy, hold, or sell?

GD carries a valuation grade of Strong Strong Buy. The trailing P/E of 21.8 sits broadly in line with the Industrials sector median of 22.0x. Our discounted cash flow model produces an intrinsic range of $321–$482 — implying a +16% margin of safety at the current price of $346.82. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate. See the DCF valuation framework for full methodology.

With a 12% beat rate on recent quarters, earnings predictability has been mixed. Analyst estimate revisions are trending upward.

What are GD's key risk factors?

With a beta of 0.34, GD exhibits a low-volatility risk profile relative to the broad market. The 95th-percentile CVaR of -7.7% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 0.8% of total portfolio loss in the worst 5% of months. Net margins of 8.1% fall below the Industrials sector average of 11%, suggesting margin pressure. Return on equity of 18.0% suggests solid capital efficiency. The balance sheet is conservatively leveraged at 38% debt-to-equity.

A put/call ratio of 1.03 indicates roughly balanced sentiment in the options market. Implied volatility of 24.7% exceeds realized volatility of 17.2% by 7 points, suggesting options are pricing in elevated risk. Insiders have been net sellers to the tune of $72.0M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.1% of float, suggesting limited bearish conviction.

How does GD fit in a diversified portfolio?

At typical HENRY portfolio weights — 10–20% of the equity allocation — GD carries a beta of 0.34, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all holdings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.

Among closely correlated names, GD shows the strongest co-movement with LHX (0.57), NOC (0.49), RTX (0.45). Investors seeking diversification should note these correlation dynamics when constructing multi-asset portfolios.

True portfolio risk is a function of the full covariance structure across all holdings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The GD analysis here is a single node in that larger structure.

For the full transatlantic conviction hierarchy — including GD's position sizing, conviction rating, and upside/risk case in the 2026 defence supercycle — see: Defence Spending 2026: The Transatlantic Allocation Case →

Investor FAQ

Is GD a buy or sell in 2026?

General Dynamics Corporation (GD) carries a Strong Buy quantitative rating from A.L. Capital Advisory, derived from Discounted Cash Flow intrinsic value analysis, five-factor model scoring (Value, Quality, Momentum, Volatility, Size), and CVaR tail risk measurement. At $346.82, the DCF midpoint margin of safety is +16% (intrinsic value range: $321 bear – $482 bull). Composite factor score: 3.6/5. Strongest factor: Volatility (5.0/5). Weakest factor: Value (3.0/5). Trailing P/E: 21.8x. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Portfolio Construction Framework →

What is the average analyst target price for GD?

Wall Street consensus target for GD: $392.22 (+13.1% upside from the current price of $346.82). The analyst target range spans $313.00 (most bearish) to $444.00 (most bullish). Consensus recommendation: Buy. Note that analyst price targets typically reflect a 12-month forward horizon and are derived from a blend of DCF, comparable-company, and sum-of-the-parts analysis. A.L. Capital Advisory’s quantitative Strong Buy rating is produced independently — from DCF intrinsic value, five-factor model scores, and CVaR tail risk — and does not mechanically track Street consensus. When the two diverge, the divergence itself is informative: it can reflect differences in time horizon, valuation methodology, or the degree to which the current price already discounts the consensus case. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Monte Carlo Simulation Framework →

How does GD score on Value, Quality, Momentum, Volatility, and Size?

GD five-factor scores (A.L. Capital Advisory, 1–5 scale): Value 3.0/5 (neutral) — measures current price versus DCF intrinsic range and trailing earnings multiples; Quality 3.0/5 (neutral) — captures profitability metrics including return on equity, net margin (ROE: 18.0%) and net margin (8.1%); Momentum 3.0/5 (neutral) — reflects recent price trajectory and earnings surprise consistency; Volatility 5.0/5 (strong) — inverse measure derived from beta, where lower historical volatility earns a higher score; Size 4.0/5 (above average) — market capitalisation rank (mega-cap $1T+ scores 5/5). Composite: 3.6/5. Factor scores above 4.0 signal a tailwind in that dimension; below 2.0 signals a material headwind. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Black-Litterman Model →

What is GD's tail risk and CVaR?

The 95th-percentile Conditional Value at Risk (CVaR) for GD on a one-month horizon is -7.7%. CVaR represents the expected average loss in the worst 5% of monthly outcomes — a more conservative tail risk measure than standard VaR, which only marks the loss threshold. Beta of 0.34 indicates below-market volatility. For reference, a diversified S&P 500 ETF carries a one-month CVaR of roughly -8% to -12% in normal market conditions; individual equity CVaR is higher due to idiosyncratic risk. At the portfolio level, what matters is the marginal CVaR contribution of each holding — not its standalone figure. The A.L. Capital Advisory Portfolio Health Check quantifies each position's marginal tail-risk contribution across your entire holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: CVaR & Tail-Risk Methodology →

What is GD's intrinsic value and DCF price target?

A.L. Capital Advisory's DCF model produces an intrinsic value range of $321 (bear case) to $482 (bull case) for General Dynamics Corporation (GD). At $346.82, the midpoint margin of safety is +16% (positive = discount to intrinsic mid; negative = premium). The bear-to-bull spread reflects genuine sensitivity to the two dominant DCF inputs: the terminal growth rate and WACC. Terminal value typically accounts for 60-80% of total intrinsic value in most equity DCF models, which is why a range is more analytically sound than a point estimate. The central analytical question is not what the DCF outputs as a single number but which growth trajectory the current market price already discounts. All DCF analysis follows CFA Institute standards and is conducted by Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →

What would trigger a rating upgrade or downgrade for GD?

Upgrade trigger: Upgrade to Strong Buy on evidence of accelerating earnings surprise magnitude combined with improvement in the Value factor score — specifically if the current 21.8x P/E is supported by an upward revision to DCF terminal growth assumptions. Downgrade trigger: An earnings miss at current valuations (21.8x trailing P/E) where there is limited earnings cushion to absorb negative surprises; or a sustained reversal in the Quality and Momentum factor scores for two or more consecutive quarters. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Investment Policy Statement Framework →

How does GD contribute to portfolio risk and diversification?

GD carries a beta of 0.34 (low-volatility / defensive relative to the broad equity market). A beta above 1.0 means the position amplifies market moves in both directions at a typical portfolio weight. Strongest peer co-movement: LHX (0.57), NOC (0.49), RTX (0.45). Holding GD alongside these names in the same portfolio increases concentration risk. True portfolio risk is a function of the full covariance structure — a single stock's beta does not reveal its marginal contribution to portfolio tail loss. The A.L. Capital Advisory Portfolio Health Check quantifies concentration risk (Herfindahl-Hirschman Index), pairwise correlations, and marginal CVaR contribution across all your holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Ledoit-Wolf Covariance Framework →

What quantitative methodology does A.L. Capital Advisory use to analyse GD?

A.L. Capital Advisory analyses General Dynamics Corporation (GD) using a four-component quantitative framework grounded in CFA Institute standards. (1) DCF Valuation: projects free cash flows under bear and bull assumptions, discounts at WACC to produce an intrinsic value range with margin-of-safety calculation. (2) Five-Factor Scoring: each equity is scored 1–5 on Value, Quality, Momentum, Volatility, and Size. (3) CVaR Tail Risk: 95th-percentile Conditional Value at Risk from historical simulation of daily returns on a one-month horizon. (4) Earnings Surprise Analysis: quarterly beat rate and magnitude are incorporated into the Momentum and Quality factor scores. The current Strong Buy rating for GD is the output of applying this complete framework to current data. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework → · CVaR & Tail-Risk Methodology →

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Valuation Framework

DCF Valuation Framework

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Risk Framework

CVaR & Tail-Risk Methodology

Why variance understates downside risk in non-normal return distributions, and how Conditional Value at Risk corrects that blind spot for institutional-grade position sizing.

Allocation Framework

Black-Litterman Model

The Bayesian allocation model from Goldman Sachs — how equilibrium market returns are combined with explicit investor views to produce stable, diversified portfolios.

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Anton Ladnyi, CFA

Founder & Portfolio Architect — A.L. Capital Advisory

Ex-Goldman Sachs Equity Research · Ex-J.P. Morgan Wealth Management · CFA Charterholder

CFA Charter ↗ CFA L1 ↗ CFA L2 ↗ CFA L3 ↗ LinkedIn ↗ X ↗

Legal Disclaimer & Important Notices

This analysis is produced using a systematic quantitative framework applied to market data and does not constitute investment advice. Prose commentary is AI-assisted and generated from structured quantitative inputs. All data and metrics are as of 2026-05-30 and are point-in-time estimates subject to revision without notice. CVaR figures are based on historical simulation and do not guarantee future outcomes. DCF ranges and upgrade/downgrade triggers are forward-looking statements based on current assumptions and may not materialise. Past performance does not guarantee future results. This analysis does not account for individual circumstances, tax position, or investment objectives — consult a qualified financial advisor before making investment decisions. This content is intended for informational purposes only and does not constitute regulated investment advice under MiFID II or FCA guidelines. This content is not intended for US persons or residents of jurisdictions where its distribution would be contrary to local law or regulation. This service is not directed at residents of Finland, Sweden, Norway, Denmark, Iceland, or Poland. The author may hold long or short positions in securities mentioned in this analysis. Nothing on this page represents a solicitation to buy or sell any security. A.L. Capital Advisory is an independent private advisory practice and is not affiliated with General Dynamics Corporation.