Deutsche Bank Starts General Dynamics Corp. (GD) at Buy, 'opportunity for investors to buy quality growth at a reasonable price'

Deutsche Bank analyst Scott Deuschle initiates coverage on General Dynamics Corp. (NYSE: GD) with a Buy rating and a price target of $271.00.

The analyst comments "We like the wide moats, improving ROIC, and favorable FCF growth profile of GD’s Aerospace, Combat Systems, and Marine businesses, and view GD’s ~7.5% fwd FCF yield as offering opportunity for investors to buy quality growth at a reasonable price. We think GD can grow FCF/sh at a double-digit CAGR through 2025, and see upside to Street FCF/sh forecasts for 2025—particularly given the opportunity for capex to reset lower. We see bizjet as being on relatively solid ground for now, and the G700 cert should be a positive catalyst for shares. Meanwhile, we track $3.2b of Ukraine supplemental funding going to programs that Combat Systems is involved in, creating a source of upside revisions there. Technologies is a challenge, and the recent loss of the CHS-6 contract to LDOS suggests some pressure on revisions—although we expect buyside is already there. Near-term margin trends at Marine arguably represents the biggest risk, but Electric Boat has shown a consistent ability to execute better than its peers, and the long-term FCF outlook for the segment is strong, thanks to Columbia Class growth coming through with limited incremental invested capital requirements."

For an analyst ratings summary and ratings history on General Dynamics Corp. click here. For more ratings news on General Dynamics Corp. click here.

Shares of General Dynamics Corp. closed at $218.18 yesterday.

You May Also Be Interested In

• Raymond James Starts SpyGlass Pharma (SGP) at Outperform
• Intuitive Machines Inc. (LUNR) PT Lowered to $32 at Cantor Fitzgerald, Reaffirms Overweight Rating
• BofA Securities Resumes American Eagle Outfitters (AEO) at Underperform