10 Wonderful Stocks to Buy Now at a Fair Price

8) General Dynamics Corporation (NYSE:GD)

Expected Earnings Growth: 20.7%

Number of Hedge Fund Holders: 48

Forward P/E Multiple (As of September 30): 18.48x   

General Dynamics Corporation (NYSE:GD) operates as an aerospace and defense company worldwide.

Market experts opine that General Dynamics Corporation (NYSE:GD) continues to enjoy a wide economic moat, given its diversified product portfolio and regulatory barriers. Furthermore, the company’s military systems like the M1 Abrams tank and Virginia class nuclear submarines continue to act as long-standing products of the US national defense.

General Dynamics Corporation (NYSE:GD) is expected to see significant growth in cash generation in H2 2024. The company also anticipates a strong Q4, projecting the expiration of accelerated depreciation. It recently highlighted that Gulfstream’s wiring issue with the G700 has largely been resolved, and margin improvement should come in the upcoming quarters. Also, General Dynamics Corporation (NYSE:GD)’s munitions orders are anticipated to rise in the next couple of years, reflecting the current threat environment.

The company is confident about Gulfstream’s higher margins over the long term and strong pipeline of orders. General Dynamics Corporation (NYSE:GD) is aiming for an FCF conversion rate approaching 100% for the current year. In Q2 2024, the company saw revenue of $12 billion, reflecting a rise of 18% as compared to Q2 2023. The operating margin came in at 9.7%, implying a 20-basis point expansion from the year-ago quarter, with strength seen in the Technologies and Combat Systems segments. The company’s business has been focusing on the disciplined execution of its programs, cost, and schedule.

Analysts at Morgan Stanley raised shares of General Dynamics Corporation (NYSE:GD) from an “Equal-weight” rating to an “Overweight” rating. They have increased the price target from $293.00 to $345.00 on 9^th August. Notably, 48 hedge funds were long General Dynamics Corporation (NYSE:GD), as per Insider Monkey’s Q2 2024 database of 912 hedge funds.