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RBC raises General Dynamics shares target, optimistic on G700 certification

EditorEmilio Ghigini
Published 04/02/2024, 07:48 AM
Updated 04/02/2024, 07:48 AM

On Tuesday, RBC Capital Markets adjusted its outlook on General Dynamics Corp. (NYSE:GD) shares, raising the price target to $325 from the previous $300 while maintaining an Outperform rating.

The revision follows the announcement that General Dynamics' Gulfstream Aerospace division has received final certification from the Federal Aviation Administration (FAA) for its G700 aircraft.

The firm does not anticipate any deliveries of the G700 in the first quarter of 2024, but it projects approximately 15 deliveries in the second quarter, aligning with the current inventory levels. The expectation for the full year remains at 50 deliveries, which is in line with the company's guidance. The certification is seen as a positive influence on investor sentiment towards General Dynamics' shares.

The analyst from RBC Capital noted that while the first deliveries of the G800 aircraft are projected for 2025, the recent certification of the G700 is a significant milestone. This development is expected to bolster confidence in General Dynamics' stock performance.

The G700 aircraft's certification is a crucial step in Gulfstream's product development timeline, ensuring that the company can proceed with its planned delivery schedule. General Dynamics' stock price target reflects the potential uplift from this achievement, as well as the anticipated positive market reaction.

InvestingPro Insights

General Dynamics Corp. (NYSE:GD) has recently achieved a significant milestone with the FAA certification of its G700 aircraft, a development that has positively influenced RBC Capital Markets to raise their price target. To further understand the investment landscape surrounding General Dynamics, let’s consider some key metrics and InvestingPro Tips. With a robust market cap of 79.86 billion USD and a Price/Earnings (P/E) ratio of 23.93, which adjusts slightly to 24.09 for the last twelve months as of Q4 2023, the company presents a stable investment profile. A notable revenue growth of 7.27% over the last twelve months highlights the company’s expanding operations.

Investors should note that General Dynamics has a history of consistent dividend growth, with an increase for 46 consecutive years, and the dividend yield currently stands at 1.95%. This commitment to returning value to shareholders is coupled with a strong financial position, where liquid assets surpass short-term obligations. Moreover, the company has managed to operate with a moderate level of debt, which is an important aspect for investors focused on long-term stability.

For those interested in the stock’s trading patterns, General Dynamics is trading near its 52-week high, with the price at 99.86% of this peak. The stock has also seen a large price uptick over the last six months, reflected in a 32.27% total return over this period. These InvestingPro Tips, along with additional insights available on InvestingPro, can provide a deeper understanding of the stock’s potential. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for more such insights. There are 11 additional InvestingPro Tips listed on the platform that could further guide investment decisions regarding General Dynamics.

The company is set to report its next earnings on April 24, 2024, which will be a pivotal moment for investors tracking the impact of the G700 certification and the anticipated delivery schedule on General Dynamics' financial performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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