Disappointing 2019 Guidance Sends GD Down; We're Trimming FVE, but Shares Still Undervalued
Wide-moat General Dynamics delivered an EPS beat for the last quarter of 2018, but cash flow came in lighter than we expected because of missed payments on the $12 billion Saudi Arabia ground vehicle contract. The 2019 outlook disappointed, coming in below both our expectations and consensus estimates. We're trimming our 2019 projections for revenue and earnings, and we also brought down our midcycle estimates slightly, which resulted in a $7 cut to our fair value estimate, which now stands at $...General Dynamics is an aerospace and defense company. The company has five operating segments: Aerospace, which provides a family of Gulfstream aircraft and services for business aircraft produced by Gulfstream and other original equipment manufacturers; Combat Systems, which provides combat vehicles, weapons systems and munitions; Information Technology, which provides information technology (IT) services, IT infrastructure modernization and professional services; Mission Systems, which provides mission-critical products and systems; and Marine Systems, which designs and builds nuclear-powered submarines, surface combatants, and auxiliary and combat-logistics ships.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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