** General Dynamics GD.N reported a 27% rise in first-quarter profit on Wednesday, driven by recovery in its aerospace segment as well as sustained strength in its defense business.
** Average recommendation of 25 brokerages is "buy", median PT is $285 - data compiled by LSEG
ON THE FENCE
** RBC Capital Markets ("sector perform", PT: $280) expects Marine and Combat profit margins to stay flat and sees the FY26 budget request as a potential negative for sentiment
** "We agree that the potential tariff impact on defense is limited, but any visibility on the tariff impact on Aerospace is necessary for increased investor confidence in the Aerospace upside" - RBC
** Morgan Stanley ("equal-weight", PT: $300) sees slightly higher risk for GD related to the Department of Government Efficiency and tariffs compared to other Prime peers like Lockheed Martin Corp LMT.N, and Northrop Grumman Corp NOC.N
** J.P. Morgan ("overweight", PT: $284) says the business jet market is strong and expects Gulfstream's profit margins to improve next year
** Morningstar (fair value: $313) says "we don't think General Dynamics is especially vulnerable, though its technologies contracts are shorter-cycle and slightly less moaty than the manufacturing divisions' long-cycle programs"
(Reporting by Akriti Shah in Bengaluru)
((akriti.shah@thomsonreuters.com))
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