General Dynamics Aerospace Margins Under Threat as G700 Q4 Deliveries Fall Short, RBC Says

MT Newswires Live12-20

General Dynamics' (GD) lower-than-expected Gulfstream G700 deliveries in Q4 are a concern as the shortfall raises doubt about the company's ability to achieve its 2025 and 2026 aerospace margin targets, RBC Capital Markets said in a note on Thursday.

The firm said that reduction of G700 delivery estimates to 12 units from 27 due to a lagging delivery cadence also impacts 2025 and 2026 projections, which it revised down to 48 and 43 units, respectively.

"The long-term impact on government service firms under Trump 2.0 and the Department of Energy is uncertain, but we do expect the uncertainty and volatility to linger well into 2025," RBC added.

The firm said that the combat systems vehicles business may see reduced US demand, though international sales and US restocking efforts remain robust. Shipbuilding is expected to remain a top defense priority, backed by Congress, but contract performance should be monitored closely.

RBC downgraded its rating on General Dynamics stock to sector perform from outperform and reduced the price target to $290 from $330.

Price: 258.94, Change: -3.33, Percent Change: -1.27

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