General Dynamics Corporation GD
Buy General Dynamics at $369.41 with RSI at 36.9 — the stock has pulled back roughly 7% from late-August levels near $396 into oversold territory while fundamentals continue to accelerate. Q2 2026 revenue of $14.1B grew 8.1% YoY and EPS of $4.25 beat estimates by 7.1%, extending a seven-quarter earnings beat streak.
At 22.2x P/E versus a 28.3x peer median, GD trades at a 21% discount to peers despite a $136.5B backlog and a 1.5-to-1 book-to-bill ratio that underpin multi-year revenue visibility. The combination of consistent execution, cheap relative valuation, and technically washed-out conditions creates an attractive entry point.
What could go wrong
- Margin compression. Gross margin has contracted from 16.8% in 2022 to 15.1% in 2025, and operating margin has slipped from 10.8% to 10.2% over the same period, suggesting cost pressure in fixed-price contracts could erode profitability further.
- Insider selling overhang. 24-month net insider selling of $243.8M across 292 transactions, with recent August 2026 activity dominated by option exercises and tax-withholding dispositions rather than open-market purchases.
- Smart money outflows. Smart money score turned slightly negative at -0.0122 as of 2026-06-30, down from 0.0339 in December 2025, indicating waning institutional conviction despite a rising fund count of 68.
- Marine Systems execution. The bulk of the $136.5B backlog sits in Marine Systems (submarines), where shipbuilding delays or cost overruns on fixed-price Navy contracts could pressure segment margins and cash conversion.
What would change my mind
Where this comes from: quarterly_results Q2 2026; earnings_surprises 2026-07-29 · earnings_surprises · peer_relative · technicals. Orin's read on GD; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All GD filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $5.9B | 0.1% of fund |
| State Street | $4.2B | 0.1% of fund |
| Bank Of America /De/ | $2.6B | 0.2% of fund |
| Vanguard Portfolio Management | $2.4B | 0.1% of fund |
| Geode Capital Management | $2.2B | 0.1% of fund |
| Jpmorgan Chase & | $1.8B | 0.1% of fund |
131 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 300 Form 4 filings, net −$243.7M. Of the 50 on hand, 0 were open-market purchases and 11 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about GD
Orin answers questions about GD from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 20.2× | 20.1× | 44.5× |
| EV/EBITDA | 14.9× | 14.9× | — |
| P/S | 1.66× | 1.68× | — |
| P/B | 3.4× | 3.3× | — |
Its P/E sits 60th percentile of its own last 5 years (+0.10σ from its own mean).
9.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $4.0B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$421
$384 – $465 · +25% against today's price
- 20 buy or overweight
- 14 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| GDGeneral Dynamics Corporation | $91B | 20.2× | 14.9× | 15.4% | 8.2% | 17% |
| ADPAutomatic Data Processing, Inc. | $105B | 24.0× | 16.7× | 48.2% | 20.1% | 70% |
| HWMHowmet Aerospace Inc. | $92B | 49.1× | 34.8× | 34.4% | 20.5% | 34% |
| LHXL3Harris Technologies, Inc. | $44B | 23.9× | 14.5× | 25.5% | 8.2% | 9% |
| LMTLockheed Martin Corporation | $121B | 19.2× | 14.0× | 11.8% | 8.2% | 86% |
| MMM3M Company | $86B | 29.6× | 17.6× | 39.4% | 11.9% | 77% |
| NOCNorthrop Grumman Corporation | $72B | 16.1× | 11.6× | 20.1% | 10.5% | 27% |
| PHParker-Hannifin Corporation | $123B | 33.7× | 22.6× | 37.7% | 17.0% | 25% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| TTTrane Technologies plc | $96B | 33.1× | 23.0× | 35.4% | 13.3% | 34% |
| UPSUnited Parcel Service, Inc. | $78B | 17.1× | 9.6× | 16.6% | 5.1% | 29% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 24.5% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $379 | $344.81 · +10% | 2026-06-10 |
| Levered DCF | $549 | $344.81 · +59% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.