CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We keep our 12-month target price of $255, 17.2x our 2024 EPS estimate (kept at $14.84; 2023 EPS lifted to $12.65 from $12.43), above GD’s five-year forward P/E average given a strong global defense environment. GD posted Q3 EPS of $3.04 vs. $3.26 (-7% Y/Y), $0.10 above consensus. We attribute the decline in EPS to a Y/Y contraction of operating margins (-100 bps) on supply chain pressures. Q3 revenue rose 6% over the prior year, driven by accelerated growth in Combat Systems (+24%; 21% of total Q3 sales), which more than offset a double-digit decline in GD’s aerospace business (-13%; 19% of sales). Softness in aero was led by fewer deliveries of Gulfstream jets due to supply chain constraints. We expect supply chain challenges to linger into 2024, though we see improvements quarter-over-quarter. Order backlog remains a bright spot, with total backlog hitting a record $95.6 billion by quarter-end on a book-to-bill ratio of 1.4. We keep GD shares at a Hold rating.