10 Best Aerospace and Defense Stocks to Buy Now

3. General Dynamics Corporation (NYSE:GD)

Number of Hedge Fund Holders: 54

General Dynamics Corporation (NYSE:GD) is the sixth largest defense contractor in the world and is renowned for being the manufacturer of the Virginia class of submarines operated by the US Navy. It is also the primary contractor of the Columbia-class project. There are ten business units in the company operating under the segments of aerospace, marine systems, combat systems, and technologies. It is one of the best aerospace and defense stocks to buy now, with 54 hedge funds bullish about the company’s prospects, according to Insider Monkey’s database as of Q1 2024.

During the first quarter of the year, the company reported an EPS of $2.88, which was 9.5% higher YoY, but seven cents lower than analysts’ expectation. Revenues and operating earnings were 8.6% and 10.4% higher compared to last year, driven by sustained demand for fleet replenishment, Abram tanks, and other combat systems. The overall results, while robust, fell slightly short of the company’s forecasts. The reason behind this was that the forecasted delivery of 15-17 G700s did not take place during the quarter because the company received the FAA certification towards the very end of the quarter.

The good news, though, is the certification is here, and the deliveries have started. The company plans to deliver 50-52 of these planes over the quarters ahead, with improving margins as time progresses, implying that overall costs will be slightly higher during Q2, before easing out in the second half of the year. General Dynamics Corporation (NYSE:GD)’s figures for the combat systems also continue to increase due to a sustained demand for tanks from European countries. The business division has received orders worth more than $1 billion since Q1 2023 from the United States and its allies, primarily in response to Russia’s aggression in Ukraine. Revenues contributed by the company’s marine systems also grew 11.3% YoY, predominantly owed to the Columbia-class construction.

General Dynamics Corporation (NYSE:GD)’s share price has increased 33% over the past year due to the reasons stated above that drive demand for the company’s products. There is consensus among analysts on the stock’s buy rating, with an average share price target of $307, an upside of 8%.