GD - Embedded Expectations Analysis - 2020 05 28
General Dynamics Corporation (GD:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 19.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about Aerospace performance, backlog cancellations, and the impact of coronavirusSpecifically, management may have concerns about further Aerospace underperformance due to coronavirus pressures, potential cancellations in their Aerospace backlog, and Gulfstream supplier production rates. Moreover, they may lack confidence in their ability to produce and deliver aircrafts given supply chain issues, support suppliers through the pandemic, and deal with elevated business uncertainty. Furthermore, they may be concerned about Combat Systems customer site closures and the progress of phased re-openings around the world. Additionally, they may lack confidence in their ability to sustain Combat Systems operating margin expansion, maintain Jet Aviation performance, and execute their Marine segment's Columbia construction contract
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.