General Dynamics Corporation (NYSE:GD) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a credible result overall, with revenues of US$48b and statutory earnings per share of US$13.63 both in line with analyst estimates, showing that General Dynamics is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for General Dynamics

Taking into account the latest results, the most recent consensus for General Dynamics from 20 analysts is for revenues of US$50.3b in 2025. If met, it would imply a reasonable 5.4% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 6.4% to US$14.91. Before this earnings report, the analysts had been forecasting revenues of US$50.3b and earnings per share (EPS) of US$15.92 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$296, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic General Dynamics analyst has a price target of US$350 per share, while the most pessimistic values it at US$231. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that General Dynamics' rate of growth is expected to accelerate meaningfully, with the forecast 5.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.9% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, General Dynamics is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for General Dynamics. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple General Dynamics analysts - going out to 2027, and you can see them free on our platform here.

You can also view our analysis of General Dynamics' balance sheet, and whether we think General Dynamics is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.