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Posted by Defense World Staff on Jul 25th, 2026

Aristotle Capital Management LLC lowered its holdings in shares of General Dynamics Corporation (NYSE:GD – Free Report) by 3.3% in the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 2,446,709 shares of the aerospace company’s stock after selling 84,573 shares during the period. General Dynamics comprises 1.8% of Aristotle Capital Management LLC’s portfolio, making the stock its 23rd largest holding. Aristotle Capital Management LLC owned approximately 0.90% of General Dynamics worth $839,782,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds also recently modified their holdings of GD. Wealth Alliance LLC raised its stake in General Dynamics by 5.9% in the 1st quarter. Wealth Alliance LLC now owns 2,103 shares of the aerospace company’s stock valued at $722,000 after purchasing an additional 118 shares during the last quarter. Entropy Technologies LP raised its position in shares of General Dynamics by 252.5% in the first quarter. Entropy Technologies LP now owns 25,855 shares of the aerospace company’s stock valued at $8,874,000 after buying an additional 18,521 shares during the last quarter. Sustainable Insight Capital Management LLC lifted its stake in shares of General Dynamics by 21.0% during the first quarter. Sustainable Insight Capital Management LLC now owns 5,720 shares of the aerospace company’s stock valued at $1,963,000 after buying an additional 994 shares during the period. Renaissance Technologies LLC acquired a new stake in General Dynamics during the first quarter worth approximately $10,358,000. Finally, Bollard Group LLC purchased a new stake in General Dynamics in the 1st quarter worth approximately $47,000. Hedge funds and other institutional investors own 86.14% of the company’s stock.

Insider Buying and Selling In other General Dynamics news, Director Mark Malcolm sold 5,480 shares of the business’s stock in a transaction dated Wednesday, June 17th. The shares were sold at an average price of $365.00, for a total transaction of $2,000,200.00. Following the sale, the director directly owned 10,643 shares in the company, valued at approximately $3,884,695. The trade was a 33.99% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, EVP Mark Lagrand Burns sold 36,480 shares of the company’s stock in a transaction that occurred on Tuesday, May 12th. The stock was sold at an average price of $345.29, for a total value of $12,596,179.20. Following the completion of the sale, the executive vice president owned 38,975 shares of the company’s stock, valued at $13,457,677.75. This trade represents a 48.35% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 78,190 shares of company stock valued at $27,041,022 over the last three months. Corporate insiders own 1.40% of the company’s stock.

Analysts Set New Price Targets Several analysts have commented on the company. Royal Bank Of Canada restated a “sector perform” rating and issued a $385.00 price target on shares of General Dynamics in a report on Thursday, April 30th. BNP Paribas Exane dropped their price target on shares of General Dynamics from $430.00 to $390.00 and set an “outperform” rating for the company in a research report on Thursday, April 30th. UBS Group raised shares of General Dynamics from a “neutral” rating to a “buy” rating in a research note on Thursday, June 11th. Wells Fargo & Company initiated coverage on shares of General Dynamics in a report on Wednesday, April 1st. They issued an “overweight” rating and a $400.00 price target on the stock. Finally, JPMorgan Chase & Co. upped their price target on General Dynamics from $385.00 to $400.00 and gave the stock an “overweight” rating in a research note on Thursday, April 30th. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating, four have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $391.15.

Check Out Our Latest Analysis on General Dynamics

Key General Dynamics News Here are the key news stories impacting General Dynamics this week:

Positive Sentiment: GD has hit a 52-week high, reflecting strong momentum and investor confidence in the defense contractor’s outlook. General Dynamics Corporation (GD) Hit a 52 Week High, Can the Run Continue? Positive Sentiment: Analysts are focusing on GD’s upcoming Q2 results, with attention on a record backlog and improving defense operations, which could support the stock if management delivers strong numbers and positive commentary on submarines and Gulfstream. General Dynamics to Release Q2 Earnings: Here’s What to Expect Positive Sentiment: Recent investor sentiment has also been helped by broader strength in defense stocks, with peers posting solid results and raising guidance, which has lifted expectations for GD ahead of its July 29 earnings release. Why General Dynamics (GD) Stock Is Up Today Neutral Sentiment: Wall Street is also watching GD’s Q2 estimates and key operating metrics closely, suggesting the market may be waiting for confirmation that recent strength is sustainable rather than purely speculative. General Dynamics (GD) Q2 Earnings on the Horizon: Analysts’ Insights on Key Performance Measures Neutral Sentiment: One article compared GD’s value profile with GE Aerospace, reinforcing that investors still see GD as a large-cap defense name with valuation appeal, but not necessarily a fresh catalyst by itself. GD vs. GE: Which Stock Is the Better Value Option? General Dynamics Stock Performance Shares of NYSE GD opened at $386.51 on Friday. The company has a quick ratio of 0.90, a current ratio of 1.38 and a debt-to-equity ratio of 0.24. The firm’s 50-day moving average price is $356.19 and its two-hundred day moving average price is $351.77. General Dynamics Corporation has a 52-week low of $306.03 and a 52-week high of $388.12. The stock has a market capitalization of $104.52 billion, a P/E ratio of 24.32, a P/E/G ratio of 2.30 and a beta of 0.34.

General Dynamics (NYSE:GD – Get Free Report) last announced its quarterly earnings results on Wednesday, April 29th. The aerospace company reported $4.10 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.67 by $0.43. The business had revenue of $13.48 billion for the quarter, compared to the consensus estimate of $12.70 billion. General Dynamics had a return on equity of 17.41% and a net margin of 8.07%.The business’s revenue was up 10.3% on a year-over-year basis. During the same quarter last year, the business posted $3.66 EPS. As a group, sell-side analysts forecast that General Dynamics Corporation will post 16.66 earnings per share for the current year.

General Dynamics Announces Dividend The firm also recently disclosed a quarterly dividend, which will be paid on Friday, August 7th. Stockholders of record on Thursday, July 2nd will be given a dividend of $1.59 per share. The ex-dividend date is Thursday, July 2nd. This represents a $6.36 annualized dividend and a dividend yield of 1.6%. General Dynamics’s payout ratio is currently 40.03%.

About General Dynamics (Free Report)

General Dynamics is a major American aerospace and defense contractor that designs, manufactures and supports a broad range of products and services for government and commercial customers worldwide. Headquartered in the United States (Reston, Virginia), the company supplies platforms and systems used by armed forces, civil authorities and private operators across multiple domains including air, land, sea and cyber.

Its principal activities span several operating businesses: a business aviation unit that develops and supports Gulfstream business jets; land systems that produce armored combat vehicles and related logistics and sustainment services; marine systems that design and construct submarines and surface ships for navies; and mission systems and information technology operations that provide command-and-control, communications, cybersecurity and systems-integration services.

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A strong stock as of late has been General Dynamics (GD - Free Report) . Shares have been marching higher, with the stock up 10.8% over the past month. The stock hit a new 52-week high of $387.69 in the previous session. General Dynamics has gained 13.4% since the start of the year compared to the 1.9% move for the Zacks Aerospace sector and the 0.4% return for the Zacks Aerospace - Defense industry.

What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 29, 2026, General Dynamics reported EPS of $4.1 versus consensus estimate of $3.68.

For the current fiscal year, General Dynamics is expected to post earnings of $16.66 per share on $55.16 in revenues. This represents a 7.76% change in EPS on a 4.97% change in revenues. For the next fiscal year, the company is expected to earn $18.32 per share on $57.63 in revenues. This represents a year-over-year change of 9.98% and 4.46%, respectively.

Valuation MetricsThough General Dynamics has recently hit a 52-week high, what is next for General Dynamics? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

General Dynamics has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 22.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22.9X. On a trailing cash flow basis, the stock currently trades at 20.1X versus its peer group's average of 15.5X. Additionally, the stock has a PEG ratio of 2.3. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, General Dynamics currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if General Dynamics meets the list of requirements. Thus, it seems as though General Dynamics shares could have potential in the weeks and months to come.

Investors looking for stocks in the Aerospace - Defense sector might want to consider either General Dynamics (GD - Free Report) or GE Aerospace (GE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

General Dynamics and GE Aerospace are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that GD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GD currently has a forward P/E ratio of 22.40, while GE has a forward P/E of 43.63. We also note that GD has a PEG ratio of 2.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GE currently has a PEG ratio of 2.64.

Another notable valuation metric for GD is its P/B ratio of 3.87. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GE has a P/B of 19.81.

Based on these metrics and many more, GD holds a Value grade of B, while GE has a Value grade of D.

GD has seen stronger estimate revision activity and sports more attractive valuation metrics than GE, so it seems like value investors will conclude that GD is the superior option right now.

In the latest close session, General Dynamics (GD - Free Report) was up +1.48% at $373.16. This change outpaced the S&P 500's 0.14% loss on the day. Elsewhere, the Dow saw a downswing of 0.01%, while the tech-heavy Nasdaq depreciated by 0.57%.

Coming into today, shares of the defense contractor had gained 4.96% in the past month. In that same time, the Aerospace sector lost 5.8%, while the S&P 500 gained 0.25%.

Market participants will be closely following the financial results of General Dynamics in its upcoming release. The company plans to announce its earnings on July 29, 2026. On that day, General Dynamics is projected to report earnings of $3.95 per share, which would represent year-over-year growth of 5.61%. At the same time, our most recent consensus estimate is projecting a revenue of $13.49 billion, reflecting a 3.44% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $16.66 per share and revenue of $55.16 billion. These totals would mark changes of +7.76% and +4.97%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for General Dynamics. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.24% higher. General Dynamics currently has a Zacks Rank of #2 (Buy).

From a valuation perspective, General Dynamics is currently exchanging hands at a Forward P/E ratio of 22.08. This indicates a discount in contrast to its industry's Forward P/E of 22.56.

It is also worth noting that GD currently has a PEG ratio of 2.21. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. GD's industry had an average PEG ratio of 1.58 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. Currently, this industry holds a Zacks Industry Rank of 98, positioning it in the top 40% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

General Dynamics (GD - Free Report) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The earnings report, which is expected to be released on July 29, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis defense contractor is expected to post quarterly earnings of $3.95 per share in its upcoming report, which represents a year-over-year change of +5.6%.

Revenues are expected to be $13.49 billion, up 3.4% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.09% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for General Dynamics?For General Dynamics, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.61%.

On the other hand, the stock currently carries a Zacks Rank of #2.

So, this combination indicates that General Dynamics will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that General Dynamics would post earnings of $3.68 per share when it actually produced earnings of $4.10, delivering a surprise of +11.41%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

General Dynamics appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected ResultsAmong the stocks in the Zacks Aerospace - Defense industry, Boeing (BA - Free Report) , is soon expected to post loss of $0.34 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +72.6%. This quarter's revenue is expected to be $24.05 billion, up 5.7% from the year-ago quarter.

The consensus EPS estimate for Boeing has been revised 457.3% lower over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -17.41%.

When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Boeing will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

The world is arming up at a pace not seen in decades. Global military spending reached a record $2.9 trillion in 2025, NATO's combined defense budgets topped $1.5 trillion for the first time in 2026, and members have committed to a path toward spending 5% of their gross domestic product (GDP) on defense. Europe alone lifted spending by double-digit percentages, the fastest growth since the Cold War. That flood of money flows to the companies that build the ships, planes, and systems, and the ones best positioned to capture it are those with the financial strength to expand. Here are three defense contractors with solid balance sheets and clear momentum.

Image source: Getty Images.

1. General Dynamics General Dynamics (GD +0.05%) is the most diversified of the group, spanning nuclear submarines, combat vehicles, government IT, and Gulfstream business jets. That mix matters because it gives the company multiple ways to grow as budgets rise at home and abroad.

The balance sheet is heading in the right direction. General Dynamics finished its most recent quarter with about $3.7 billion in cash, and net debt fell to roughly $4.4 billion from $5.7 billion at the end of 2025, meaning the company is paying down borrowings while still investing. Its total order backlog hit a record near $131 billion, with total potential contract value closer to $188 billion, and revenue for its Marine Systems unit, which builds submarines, rose 21% as the U.S. races to expand its undersea fleet. With a genuine cash engine and shrinking debt, General Dynamics can fund shipyard expansion while rewarding shareholders.

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2. Northrop Grumman Northrop Grumman (NOC +0.56%) sits at the center of the highest-priority programs in defense, including the B-21 Raider stealth bomber, space systems, and missile defense, all areas that swell when threats rise. Its order backlog stands at a record of roughly $96 billion, giving it years of visible work.

The financial picture here comes with a nuance worth understanding. Northrop generated strong free cash flow of about $3.3 billion in 2025, but it is now plowing money into expanding B-21 production, committing to a multiyear capital investment plan of about $2.5 billion after agreeing to boost bomber capacity by 25%. That heavy spending can make near-term cash flow uneven, yet it is the kind of investment that builds future earnings. Management reaffirmed full-year projections calling for free cash flow of roughly $3.1 billion to $3.5 billion, indicating that underlying cash generation remains healthy even as it invests for growth.

3. Curtiss-Wright Curtiss-Wright (CW 1.09%) is the smallest and least famous of the three, and it may have the cleanest balance sheet. It makes specialized defense electronics, actuation systems, and the nuclear technology that powers submarines and aircraft carriers, giving it a quiet but critical role in the naval build-out.

Curtiss-Wright carries roughly $958 million in total debt against about $371 million in cash and short-term investments, and its net debt sits at a conservative level relative to its equity. Just as important, it converts more than 105% of its earnings into free cash flow, and it recently raised its cash flow outlook toward the $580 million to $600 million range. New orders climbed 16%, and its order backlog reached about $4.3 billion, with roughly 90% of that expected to turn into revenue during the next three years. That is a durable, low-leverage business riding the same demand wave as its larger peers.

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Defense investing is not without pitfalls. These stocks have run up as investors piled onto the rearmament theme, so valuations are no longer cheap. Budgets ultimately depend on politics, and appropriations can be delayed, trimmed, or redirected, especially in the U.S. Big programs like the B-21 also carry execution risk, and heavy upfront spending can pressure profits before it pays off.

The takeaway for investors Rising global military budgets are a powerful and durable tailwind, but the companies that win will be the ones with the cash and balance sheets to scale into the demand. General Dynamics offers diversification and a strengthening balance sheet; Northrop Grumman offers exposure to the most critical programs while investing for growth; and Curtiss-Wright offers low-leverage, high-quality cash generation. I would treat all three as ways to invest in a lasting trend, while keeping valuation and political risk in view.

In the latest trading session, General Dynamics (GD - Free Report) closed at $365.63, marking a -1.05% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.38%. On the other hand, the Dow registered a gain of 0.29%, and the technology-centric Nasdaq increased by 0.62%.

Heading into today, shares of the defense contractor had gained 1.48% over the past month, outpacing the Aerospace sector's loss of 2.35% and lagging the S&P 500's gain of 1.61%.

The upcoming earnings release of General Dynamics will be of great interest to investors. The company's earnings report is expected on July 29, 2026. The company is forecasted to report an EPS of $3.94, showcasing a 5.35% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $13.45 billion, showing a 3.17% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $16.6 per share and a revenue of $55.02 billion, demonstrating changes of +7.37% and +4.69%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for General Dynamics. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.16% upward. Currently, General Dynamics is carrying a Zacks Rank of #2 (Buy).

Investors should also note General Dynamics's current valuation metrics, including its Forward P/E ratio of 22.26. This represents a discount compared to its industry average Forward P/E of 22.32.

Meanwhile, GD's PEG ratio is currently 2.23. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. GD's industry had an average PEG ratio of 1.56 as of yesterday's close.

The Aerospace - Defense industry is part of the Aerospace sector. With its current Zacks Industry Rank of 101, this industry ranks in the top 42% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? General Dynamics (GD - Free Report) , which belongs to the Zacks Aerospace - Defense industry, could be a great candidate to consider.

When looking at the last two reports, this defense contractor has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 6.44%, on average, in the last two quarters.

For the most recent quarter, General Dynamics was expected to post earnings of $3.68 per share, but it reported $4.1 per share instead, representing a surprise of 11.41%. For the previous quarter, the consensus estimate was $4.11 per share, while it actually produced $4.17 per share, a surprise of 1.46%.

Price and EPS Surprise

With this earnings history in mind, recent estimates have been moving higher for General Dynamics. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

General Dynamics currently has an Earnings ESP of +5.05%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on July 29, 2026.

With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

General Dynamics to Webcast 2026 Second-Quarter Financial Results Conference Call PR Newswire RESTON, Va., July

The Zacks Aerospace-Defense industry continues to enjoy favorable long-term fundamentals, supported by rising global defense spending, military modernization initiatives, and increasing geopolitical tensions that are driving demand for advanced defense systems and long-term procurement programs. Commercial aviation also offers attractive growth prospects as global air travel is expected to expand steadily over the coming decades. However, persistent supply-chain disruptions, labor shortages, and component constraints continue to challenge the industry by delaying aircraft production and deliveries and slowing fleet modernization efforts. The leading companies in the aerospace-defense industry that you might want to keep an eye on are GE Aerospace (GE - Free Report) , RTX Corporation (RTX - Free Report) and General Dynamics (GD - Free Report) . 

About the Industry The Zacks Aerospace-Defense industry comprises companies that primarily design and manufacture heavy-built products like commercial as well as military jets and helicopters, tankers and other combat vehicles, missiles, combatant ships as well as auxiliary ships, submarines, bombs, guns, space transportation vehicles, military satellites and a few more. The industry also includes cybersecurity players that offer information technology services and C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) solutions. A portion of its revenues comes from defense contractors offering spare parts, aircraft modification, ship repair and overhaul services, and supply-chain management services.

3 Major Trends in the Aerospace-Defense Industry Growing Defense Spending & Geopolitical Tensions: Heightened geopolitical uncertainty is prompting governments worldwide to accelerate defense modernization and expand military expenditures. As defense priorities shift toward strengthening national security, contractors are increasingly securing long-term procurement programs that extend beyond initial equipment sales to include sustainment, modernization, training, and lifecycle support. These multi-year programs provide greater revenue visibility, improve cash flow stability, and support sustained earnings growth. Reinforcing this trend, the U.S. Department of War unveiled President Trump's proposed fiscal 2027 defense budget in April 2026, seeking a record $1.5 trillion in funding — approximately 42% higher than current levels. The proposal allocates more than $756.8 billion toward new military capabilities, highlighting continued investment in next-generation defense technologies and the expansion of the U.S. defense industrial base.

Air Traffic View Boosts Opportunities: According to a report by the International Air Transport Association (“IATA”), global air passenger demand is expected to grow 2.1% year over year in 2026. This marks a significant deceleration from the 5.3% growth recorded in 2025. The Middle East region faces a deep traffic contraction due to strictly closed airspaces, forcing massive traffic rerouting. However, according to IATA’s long-term outlook, global air passenger demand is expected to more than double by 2050, at a compound annual growth rate (CAGR) of 3.1% to reach 20.8 trillion Revenue Passenger Kilometers (RPKs). Defense companies, especially those tied to aerospace manufacturing and technology, benefit through technological advances and improved production economics.

Supply-Chain Issues Continue to Act as a Headwind: The Aerospace and Defense industry continues to face supply-chain challenges that originated during the pandemic, when a sharp decline in aircraft demand led suppliers to reduce production capacity, scale back investments, and shrink their workforces. Although demand has recovered strongly, many suppliers are still struggling to ramp up production, resulting in shortages of critical components, longer lead times, and delays in aircraft manufacturing and deliveries. According to IATA, these supply-chain constraints are limiting airlines' ability to expand capacity to meet robust passenger demand while slowing the replacement of older aircraft with newer, more fuel-efficient models, thereby delaying progress toward the industry's CO??? emissions reduction goals. IATA also noted that constrained aircraft availability, labor shortages, and bottlenecks across the global aerospace supply chain remain significant challenges, affecting the timely production and delivery of aircraft and other essential aerospace systems.

Zacks Industry Rank Reflects Bright Outlook The Zacks Aerospace-Defense industry is housed within the broader Zacks Aerospace sector. It currently carries a Zacks Industry Rank #105, which places it in the top 43% of more than 246 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present a few aerospace-defense stocks that you may want to add to your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.

Industry Lags S&P 500 & Sector The Aerospace-Defense industry has underperformed the Zacks S&P 500 composite and its sector over the past year. The stocks in this industry have collectively surged 4.5%, while the Zacks Aerospace sector has soared 8.9% during the said time frame. The Zacks S&P 500 composite has gained 23.2%.

One-Year Price Performance

Industry's Current Valuation On the basis of trailing 12-month EV/Sales, which is used for valuing capital-intensive stocks like aerospace-defense, the industry is currently trading at 2.91X compared with the S&P 500’s 5.87X and the sector’s 3.28X.

Over the past five years, the industry has traded as high as 3.34X, as low as 1.99X and at the median of 2.73X.

EV-Sales Ratio TTM

3 Aerospace-Defense Stocks to Buy GE Aerospace: Headquartered in Evendale, OH, GE Aerospace is a leading designer, developer and producer of jet engines, components and integrated systems for military, commercial and business aircraft. In June 2026, GE Aerospace and Wolfspeed signed a memorandum of understanding to accelerate the adoption of high-voltage silicon carbide technology by developing standardized power modules for aerospace, defense, industrial electrification, and solid-state transformer applications. The collaboration strengthens GE Aerospace's next-generation electrification portfolio by enabling more compact, efficient, and reliable power systems, enhancing its competitive position in advanced aerospace and defense platforms while building a more resilient domestic supply chain for critical semiconductor technologies.

The Zacks Consensus Estimate for GE’s 2026 sales calls for an increase of 15.2% year over year. The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates an improvement of 17.4% year over year. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Price & Consensus: GE

RTX: Based in Waltham, MA, RTX has emerged as an aerospace and defense company, providing advanced systems and services for commercial, military and government customers worldwide. In July 2026, RTX's Raytheon and NATO launched feasibility studies to expand AMRAAM missile production in Europe by qualifying additional regional suppliers, increasing manufacturing capacity, accelerating deliveries, and strengthening the missile supply chain for U.S. and allied forces. The initiative reinforces the company’s leadership in missile systems, expands its long-term production pipeline through greater NATO demand and improves supply-chain resilience.

The Zacks Consensus Estimate for RTX’s 2026 sales calls for an increase of 6% year over year. The Zacks Consensus Estimate for 2026 EPS indicates a rise of 9.9% year over year. RTX currently has a Zacks Rank #2.

Price & Consensus: RTX

General Dynamics: Headquartered in Falls Church, VA, General Dynamics engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. At the end of the first quarter of 2026, General Dynamics witnessed a solid backlog of $130.84 billion, driven by a strong order inflow. The estimated contract value, which combines the total backlog with the potential contract value, totaled $188.44 billion at the end of the first quarter of 2026. The strength of the order flow was driven by strong demand across the company’s product and services portfolio.

The Zacks Consensus Estimate for GD’s 2026 sales calls for a 4.7% improvement year over year. The Zacks Consensus Estimate for 2026 EPS indicates an increase of 7.3% year over year. GD currently has a Zacks Rank #2.

Price & Consensus: GD

Investors with an interest in Aerospace - Defense stocks have likely encountered both General Dynamics (GD - Free Report) and RTX (RTX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both General Dynamics and RTX are sporting a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GD currently has a forward P/E ratio of 22.72, while RTX has a forward P/E of 29.13. We also note that GD has a PEG ratio of 2.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RTX currently has a PEG ratio of 2.85.

Another notable valuation metric for GD is its P/B ratio of 3.91. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RTX has a P/B of 3.99.

These metrics, and several others, help GD earn a Value grade of B, while RTX has been given a Value grade of C.

Both GD and RTX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GD is the superior value option right now.

Key Takeaways General Dynamics is expanding its submarine role through Electric Boat's U.S. Navy work.Electric Boat builds Virginia-class submarines and leads the Columbia-class replacement program.GD benefits from rising undersea warfare demand, naval modernization and a strong backlog. General Dynamics (GD - Free Report) continues to strengthen its position in the global submarine market through its Electric Boat business, one of the leading designers, builders and sustainment providers of nuclear-powered submarines for the U.S. Navy. The business plays a critical role in supporting the Navy's undersea warfare capabilities by developing advanced submarine platforms equipped with enhanced stealth, survivability and mission effectiveness.

Electric Boat is responsible for the design, engineering and construction of the Virginia-class fast-attack submarines and serves as the prime contractor for the Columbia-class ballistic missile submarines, which are expected to replace the aging Ohio-class fleet and form the backbone of the United States' sea-based nuclear deterrent. The company also provides lifecycle support, modernization and engineering services to help ensure the long-term operational readiness of these strategic assets.

Growing geopolitical tensions, increasing naval modernization efforts and rising investments in undersea warfare capabilities are driving strong demand for advanced submarines worldwide. Modern submarines are increasingly being equipped with improved stealth technologies, long-range strike capabilities, advanced sonar systems and unmanned underwater vehicle integration, making them a critical component of modern naval defense strategies.

General Dynamics is well-positioned to benefit from these long-term trends through its deep expertise in submarine design, engineering and production, supported by decades of experience and a strong backlog of naval programs. The company's continued investments in advanced manufacturing, digital engineering and workforce expansion further reinforce its ability to support future submarine demand.

Submarine Stocks to Keep on the RadarOther aerospace and defense companies strengthening their presence in the submarine market are discussed below:

Huntington Ingalls Industries (HII - Free Report) : Through its Newport News Shipbuilding division, HII is a key builder of the U.S. Navy's Virginia-class attack submarines and Columbia-class ballistic missile submarines. The company also provides maintenance, modernization and lifecycle sustainment services that support fleet readiness.

BAE Systems (BAESY - Free Report) : The company is a leading participant in the United Kingdom's submarine programs and is the prime contractor for the Royal Navy's Astute-class nuclear-powered attack submarines. It also contributes to the next-generation Dreadnought-class ballistic missile submarine program.

The Zacks Rundown for GDShares of GD have risen 23.5% in the past year compared with the industry’s 8.3% growth.

Image Source: Zacks Investment Research

The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.75X compared with its industry’s average of 2.66X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for GD’s 2026 and 2027 earnings has moved north over the past 60 days.

Image Source: Zacks Investment Research

General Dynamics delivered 10.3% revenue growth in Q1 2026, with all four segments growing. Marine Systems led the quarter, helped by Columbia-class and Virginia-class submarine work. Backlog reached $130.8 billion, up 47.6% year over year.

General Dynamics (GD - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

As such, the Zacks rating upgrade for General Dynamics is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for General Dynamics imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for General DynamicsThis defense contractor is expected to earn $16.59 per share for the fiscal year ending December 2026, which represents no year-over-year change.

Analysts have been steadily raising their estimates for General Dynamics. Over the past three months, the Zacks Consensus Estimate for the company has increased 1.9%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of General Dynamics to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

Key Takeaways General Dynamics is expanding its C5ISR presence through advanced defense tech and systems integration.GDIT supports U.S. Navy C5ISR upgrades with integration, engineering, logistics and installation.GD shares are up 18.6% in the past year and trade below the industry on forward 12-month Price/Sales. General Dynamics (GD - Free Report) continues to strengthen its position in the Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) market through its advanced defense technology and systems integration capabilities. The company's General Dynamics Information Technology (GDIT) business develops mission-critical solutions that help military customers enhance situational awareness, improve decision-making and support multi-domain operations across increasingly complex battlefield environments.

A key example is GDIT's role in modernizing and integrating advanced C5ISR systems for the U.S. Navy. The company provides end-to-end support services, including systems integration, engineering, procurement, logistics and installation, to enhance secure communications, information sharing and mission effectiveness across naval operations.

GDIT's C5ISR capabilities support a wide range of platforms, including guided missile destroyers, aircraft carriers, Coast Guard vessels, manned and unmanned aircraft, as well as shore-based facilities. These integrated solutions help improve operational readiness, strengthen command and control capabilities and enable seamless upgrades to existing defense platforms without disrupting ongoing missions.

With defense agencies worldwide increasingly investing in integrated, network-centric warfare capabilities, demand for advanced C5ISR solutions is expected to remain strong. General Dynamics' continued investments in systems integration, cybersecurity and mission-critical technologies position it well to benefit from long-term defense modernization trends and the growing need for resilient, connected military networks

Other Stocks to Keep on the WatchlistOther aerospace and defense companies expanding their C5ISR capabilities are discussed below:

BAE Systems (BAESY - Free Report) : The company provides C5ISR solutions, including systems engineering, integration, sustainment services and enterprise IT. Its technologies support military operations across land, air, sea and cyber domains, improving mission effectiveness.

Kratos Defense & Security Solutions (KTOS - Free Report) : The company delivers advanced C5ISR solutions, specializing in the integration of mission-critical electronic systems. Its technologies enhance secure communications, intelligence gathering and battlefield connectivity for defense customers.

The Zacks Rundown for GDShares of GD have risen 18.6% in the past year compared with the industry’s 1.3% growth.

Image Source: Zacks Investment Research

The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.66X compared with its industry’s average of 2.59X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for GD’s 2026 and 2027 earnings has moved north over the past 60 days.

Image Source: Zacks Investment Research

JERSEY CITY, N.J., June 24, 2026 (GLOBE NEWSWIRE) -- GD Culture Group Limited (Nasdaq: GDC) (the “Company” or “GDC”) today announced that the Company had received a written notification letter (the “Notification Letter”) from the Nasdaq Stock Market LLC (“Nasdaq”) on June 22, 2026, notifying the Company that it is not in compliance with the minimum bid price requirement set forth in the Nasdaq Listing Rules 5550(a)(2) for continued listing on the Nasdaq.

Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s common stock for the 30 consecutive business days from May 7, 2026 to June 18, 2026, the Company no longer meets the minimum bid price requirement.

The Notification Letter does not impact the Company’s listing on the Nasdaq Capital Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until December 21, 2026, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company’s common stock must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event the Company does not regain compliance by December 21, 2026, the Company may be eligible for additional time to regain compliance or may face delisting. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during such compliance period, including by effecting a reverse stock split, if necessary.

The Company’s business operations are not currently affected by the receipt of the Notification Letter. The Company is monitoring the closing bid price of its common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of its outstanding common stock, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

About GD Culture Group Limited

GD Culture Group Limited is a Nevada corporation and holding company. The Company is currently undergoing a strategic transition toward leveraging its artificial intelligence and virtual content generation technologies to enter the interactive reading and narrative entertainment market. The Company’s main businesses include AI-driven digital human technology. For more information, please visit the Company's website at https://www.gdculturegroup.com/.

Forward-Looking Statements

This communication contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. Such statements may be, but need not be, identified by words such as "may," "believe," "anticipate," "could," "should," "intend," "plan," "will," "aim(s)," "can," "would," "expect(s)," "estimate(s)," "project(s)," "forecast(s)," "positioned," "approximately," "potential," "goal," "strategy," "outlook" and similar expressions. Examples of forward-looking statements include, among other things, statements regarding assembly and distribution capabilities, decentralized production, and fully digitalized autonomous driving solutions. All such forward-looking statements are based on management's current beliefs, expectations and assumptions, and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed or implied in this communication. For additional risks and uncertainties that could impact the Company’s forward-looking statements, please see disclosures contained in the Company’s public filings with the SEC, including the "Risk Factors" in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2026 and subsequent Quarterly Reports on Form 10-Q that the Company has filed or may file with the SEC, which may be viewed at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

GD Culture Group Limited
Investor Relations Department
Email: [email protected]

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: [email protected]

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

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Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

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How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

#1 (Strong Buy) stocks have produced an unmatched +24% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

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You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

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Stock to Watch: General Dynamics (GD - Free Report) Headquartered in Falls Church, VA, General Dynamics Corporation engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. The company was incorporated in February 1952.

GD is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Aerospace stock. GD has a Momentum Style Score of A, and shares are up 0.1% over the past four weeks.

Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.29 to $16.59 per share. GD also boasts an average earnings surprise of +5.3%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, GD should be on investors' short list.

General Dynamics (GD - Free Report) closed at $364.11 in the latest trading session, marking a +1.27% move from the prior day. The stock's change was more than the S&P 500's daily loss of 0.57%. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, lost 1.15%.

Prior to today's trading, shares of the defense contractor had gained 4.79% lagged the Aerospace sector's gain of 8.09% and outpaced the S&P 500's gain of 2.14%.

The upcoming earnings release of General Dynamics will be of great interest to investors. It is anticipated that the company will report an EPS of $3.93, marking a 5.08% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $13.43 billion, indicating a 2.97% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $16.58 per share and revenue of $55 billion, indicating changes of +7.24% and +4.65%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for General Dynamics. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. As of now, General Dynamics holds a Zacks Rank of #3 (Hold).

With respect to valuation, General Dynamics is currently being traded at a Forward P/E ratio of 21.69. This denotes a discount relative to the industry average Forward P/E of 24.92.

We can also see that GD currently has a PEG ratio of 2.24. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Aerospace - Defense industry held an average PEG ratio of 1.53.

The Aerospace - Defense industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 97, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

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The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

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How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

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To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: General Dynamics (GD - Free Report) Headquartered in Falls Church, VA, General Dynamics Corporation engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. The company was incorporated in February 1952.

GD is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. GD has a Growth Style Score of A, forecasting year-over-year earnings growth of 7.2% for the current fiscal year.

For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.03 to $16.58 per share. GD boasts an average earnings surprise of +5.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, GD should be on investors' short list.

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Rocket Lab (NASDAQ:RKLB | RKLB Price Prediction) is the ticker everyone wants to talk about, riding a 425.79% one-year run on Neutron hype, Golden Dome contracts, and the coming wave of space-economy IPOs. Beneath that one-year run sit operating realities the hype obscures.

Rocket Lab carries a $78.58 billion market cap on $679.5 million in trailing revenue, a 115.64 price-to-sales ratio, and a -26.9% profit margin. The Neutron rocket debut was pushed from Q1 2026 to Q4 2026 after a stage-1 tank test failure, the company burned $165.5 million in operating cash in FY 2025, and management raised $450 million through an at-the-market equity offering in a single quarter. Diluted share count has marched to 629 million. This is a story stock priced for a future that has not arrived, in a launch business that is, as the custom thesis puts it, capital-intensive, carrying extreme execution risks and thin operating margins where a single mechanical anomaly can halt revenues for quarters.

Now look at General Dynamics (NYSE:GD), which carries a $92.73 billion market cap, barely larger than Rocket Lab, while running an entirely different business.

1. The Valuation Mismatch Is Absurd General Dynamics trades at 21x trailing earnings and 21x forward earnings on $53.81 billion in trailing revenue and $15.88 in trailing EPS. Rocket Lab generates roughly 1% of that revenue at a $78.58 billion cap. The market is paying nearly the same dollar amount for a profitable defense titan with a 0.345 beta as it is for an unprofitable small-launch operator with a 2.313 beta. Year-to-date, General Dynamics is up 2.75% while Rocket Lab is up 94.61%. The crowd has chosen sides.

2. A Cash Machine Returning Billions In Capital Q1 FY26 operating cash flow hit $2.155 billion, or 192% of net earnings, with free cash flow of $1.952 billion. FY25 produced $5.12 billion in operating cash flow and $3.96 billion in free cash flow. Capital returned: $1.593 billion in FY25 dividends plus $637 million in buybacks, with another $405 million in Q1 dividends and $217 million in repurchases. The dividend per share sits at $6.09. Rocket Lab pays no dividend and funds growth by selling stock.

3. The Same Tailwinds, Already Monetized Total estimated contract value reached $188.44 billion against a consolidated 2-to-1 book-to-bill ratio. Marine Systems revenue grew 21.0% with operating earnings up 26.4%, anchored by the company’s role as the exclusive builder of the U.S. Navy’s nuclear-powered submarines. Gulfstream delivered 38 aircraft with the Aerospace book-to-bill swinging to 1.2x from 0.8x. CEO Phebe Novakovic called it “a very good start to the year, delivering strong operating results and excellent cash conversion.” Four consecutive quarters of EPS beats back her up.

Wall Street’s average target sits at $391.55 against a current $342.89. For investors weighing speculative space exposure against established defense cash flow, the data sits on the table: a 115x price-to-sales small-launch operator on one side, a 21x earnings prime contractor returning billions in capital on the other.

The Global X - Defense Tech ETF (SHLD 2.04%) offers lower costs, while the Invesco Aerospace & Defense ETF (PPA 1.24%) provides a deeper track record and higher recent total returns.

Both ETFs provide targeted exposure to the defense and aerospace industries, serving as defensive plays or thematic growth vehicles. While the Global X fund captures newer defense technology trends, the Invesco fund focuses on established U.S. homeland security and aerospace operations. This comparison weighs cost against performance history.

Snapshot (cost & size)MetricSHLDPPAIssuerGlobal XInvescoExpense ratio0.5%0.58%1-yr return (as of May 27, 2026)15.8%32.1%Dividend yield0.5%0.4%Beta0.190.72AUM$7.7B$8.2BBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Global X fund is more affordable, with an expense ratio of 0.5%, compared to PPA’s 0.58%. Additionally, the Global X fund offers a slightly higher dividend yield of 0.5% versus 0.4% for its Invesco counterpart.

Performance & risk comparisonMetricSHLDPPAMax drawdown (2 yr)(20.1%)(15.2%)Growth of $1,000 over 2 years (total return)$1,948$1,672What's insideThe Invesco Aerospace & Defense ETF (PPA) focuses on the development, manufacturing, and support of defense and aerospace systems. Its portfolio holds 61 stocks, primarily allocated to Industrials (90%) and Technology (10%). Its largest positions include Boeing Co. (BA 1.08%) at 8.38%, General Electric Co (GE +0.76%) at 8.20%, and RTX Corp (RTX 0.37%) at 6.98%. Launched in 2005, the fund paid $0.66 per share over the trailing 12 months, reflecting a mature portfolio of American industrial staples.

The Global X - Defense Tech ETF (SHLD) tracks the Global X Defense Tech Index with a more concentrated 48 holdings. It mirrors the industrial tilt at 88% while allocating 12% to technology firms. Its top holdings include Lockheed Martin Corp (LMT 1.56%) at 8.70%, Rtx Corporation at 7.87%, and General Dynamics Corp (GD +0.31%) at 7.83%. Launched in 2023, the fund has a trailing-12-month dividend of $0.36 per share, representing a newer entry focused on modern warfare technology.

For more guidance on ETF investing, check out the full guide at this link.

Which looks like the better buyThe Global X - Defense Tech ETF (SHLD) and the Invesco Aerospace & Defense ETF (PPA) are both defense sector ETFs that investors may want to consider. Let’s have a closer look at how these two ETFs compare to one another.

First, there’s SHLD. This fund holds about 50 stocks and was launched in 2023. Since its inception, the fund has generated a total return of 177%, equating to a compound annual growth rate (CAGR) of  45.7%. This is excellent performance, as the S&P 500 has generated a total return of 75% over the same period, with a CAGR of 23.1%. All that said, the fund does have an expense ratio of 0.50%, which is above average, and well above what investors will pay for many passive index funds with expense ratios below 0.10%. Finally, the fund has a rather meager dividend yield of only 0.5%.

Then, there’s PPA. It has slightly more holdings, with 61 stocks. This fund has a much longer history, having been started in 2005. Its lifetime total return is around 1,340%, equating to a CAGR of 13.9%. That’s better than the S&P 500, which has a CAGR of 11.4% over the same 21-year period. PPA’s expense ratio is 0.58%, which is also above average. Its 0.4% dividend yield suggests the fund may not be appealing to income-oriented investors.

In summary, both funds have delivered outstanding returns, both in the last few years and, in the case of PPA, over more than two decades. Therefore, growth-seeking investors would be wise to consider either fund. Those focused on performance and minimizing their expenses will likely favor SHLD.

Rose's Income Garden (RIG) portfolio of 71 holdings yields 6.08% forward and is up 7.8% YTD, emphasizing income and selective growth. General Dynamics remains a core defensive holding, offering a 1.88% yield, a 6% dividend raise, and reliable income, though currently trading above fair value. British American Tobacco provides a 5.52% yield, recently raised its dividend by 2.6%, and now appears fairly valued after a period of undervaluation.

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: General Dynamics (GD - Free Report) Headquartered in Falls Church, VA, General Dynamics Corporation engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. The company was incorporated in February 1952.

GD is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 20.86; value investors should take notice.

For fiscal 2026, six analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.16 to $16.58 per share. GD boasts an average earnings surprise of +5.3%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, GD should be on investors' short list.

The Pentagon’s FY2027 budget request totals $1.5 trillion, with $54 billion earmarked for autonomous and remotely operated systems and another $39 billion routed through what the Department of War now calls “Drone Dominance.

That structural tailwind is the entire pitch behind Global X Defense Tech ETF (NYSEARCA:SHLD), a thematic vehicle that has gathered roughly $7.5 billion in assets at a 50 basis point expense ratio. SHLD is the largest pure-play vehicle for betting on drones, loitering munitions, and the systems built to hunt them.

What you are actually buying The return engine is concentrated positions in global defense primes alongside a long tail of autonomous-systems names. Lockheed Martin (NYSE:LMT | LMT Price Prediction) sits at about 8.4% of the fund, RTX (NYSE:RTX) at 7.8%, and General Dynamics (NYSE:GD) at 7.7%.

The names retail investors actually associate with autonomous warfare carry smaller weights. Roughly half the book sits outside the United States, with sizeable positions in BAE Systems, SAAB, Hanwha Aerospace, Thales, Leonardo, and Elbit Systems.

Does the autonomous thesis show up in returns Year-to-date through early June, SHLD is down about 1.6%. The iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA) is up 7%. The SPDR S&P Aerospace & Defense ETF (XAR) is up 13%. The S&P 500 is up 7%. Over the past year, SHLD returned about 13% while ITA returned 28.8% and XAR returned 39%. The fund organized around the most exciting story in defense has trailed every reasonable benchmark.

Mix explains the gap. The geographic dilution into European and Asia-Pacific contractors meant US-only ETFs captured more of the rotation into American primes. And the pure-play autonomous names dragged hard. KTOS is down 30% year-to-date, AVAV down 31%.

Kratos raised FY2026 revenue guidance to $1.70 billion to $1.76 billion and AVAV posted 143% year-over-year revenue growth last quarter. Kratos CEO Eric DeMarco called it a “generational recapitalization of the U.S. defense industrial base”. The market has yet to pay for that story. Meanwhile LHX (up 4% YTD) and BWXT (up 9%) did the quiet work, which is precisely what XAR and ITA are weighted to capture.

The tradeoffs you accept International dilution. Nearly half the fund sits outside the US, so you are partly betting on German rearmament and Korean shipbuilders alongside Pentagon checks. Good in NATO-led years. Bad in 2026. Long-tail valuation risk. KTOS trades at a forward P/E around 152 and AVAV around 50. Any procurement delay compresses the multiple fast, as AVAV’s $151 million BADGER SCAR goodwill writedown demonstrated. Top-heavy concentration. The top five holdings make up roughly 37% of the fund. Buying SHLD for drones still means most of your money sits in Lockheed, RTX, GD, Rheinmetall, and Palantir. Who it fits SHLD works as a 3% to 5% thematic sleeve for investors who specifically want global defense exposure with a tilt toward emerging autonomous platforms, and who accept that ITA (at a cheaper expense ratio) will likely keep up or beat it in any US-driven defense rally. Investors who want pure American defense exposure already have better tools in ITA and XAR.

Investors who want the autonomous-weapons trade specifically can own KTOS and AVAV directly and skip the dilution. SHLD expresses a credible long-term thesis about where defense spending is going. So far it has been a worse way to play that thesis than just buying the boring ETF next to it.