Is GD a buy, hold, or sell?
GD carries a valuation grade of Strong Strong Buy. The trailing P/E of 23.3 sits broadly in line with the Industrials sector median of 22.0x. Our discounted cash flow model produces an intrinsic range of $316–$481 — implying a +9% margin of safety at the current price of $365.63. 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 0.94 indicates roughly balanced sentiment in the options market. Implied volatility of 51.5% exceeds realized volatility of 24.9% by 27 points, suggesting options are pricing in elevated risk. Insiders have been net sellers to the tune of $69.1M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.3% 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 (0.62), NOC (0.54), RTX (0.53). 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 →
