General Dynamics (GD) Stock Forecast & Price Target

General Dynamics is demonstrating an upward trajectory in its fundamental performance, which is contributing to a more favorable valuation. The anticipated increase in unspent budget authority, projected to rise significantly with the FY26 budget, should provide further support for the company's growth initiatives. Additionally, improvements in margins within the Aerospace segment, particularly due to the G700 learning curve, along with enhanced contract performance taking shape in the Combat segment, bolster the firm’s outlook for 2026 earnings estimations.

General Dynamics faces a negative outlook due to indifferent investor sentiment and execution issues in its Aerospace and Marine segments, affecting their backlog to revenue conversion. Additionally, the urgency from the Pentagon regarding depleted inventories and increasing global threats suggests potential volatility and pressure on defense spending. As a result, these factors contribute to concerns about the company's ability to effectively capitalize on government contracting opportunities and sustain financial performance.