Key Takeaways for General Dynamics Stock as of July 2026
- Broad-Based Beat: GD posted $14.09B in Q2 revenue, 4.06% above street estimates, while adjusted EPS of $4.24 topped estimates by 6.60% and climbed 13.37% YoY.
- Guidance Raised Again: Full-year EPS guidance now sits at $16.80 to $16.90 for 2026.
- Record Backlog: Backlog closed the quarter at $136.5B, up 32% YoY, with a company-wide book-to-bill of 1.4x and Combat Systems running at 2.1x.
- Cash Generation Surge: CFO Kim Kuryea reported $1.9B of Q2 operating cash flow and over $4B for the first half, with free cash flow conversion above 150% through June.
GD Beats Across Every Line and Raises Its Full-Year EPS Guide Again
General Dynamics (GD) closed its second quarter on June 30, 2026 with $14.1 billion in revenue and $4.24 in adjusted diluted earnings per share, beating its own consensus targets on more revenue, more operating earnings and better margins than the sell side expected. Revenue rose 8.07% year over year and 4.55% sequentially, while operating earnings of $1.46 billion climbed 11.88% against last year’s second quarter and 5.36% above street estimates. Net income of $1.16 billion grew 14.40% year over year, and the operating margin reached 10.36%, up 35 basis points from a year ago.
Aerospace led the gains. Revenue in the segment rose 15.1% year over year to $3.5 billion on 41 aircraft deliveries, three more than planned, and operating earnings jumped 26.6% to $510 million as margin expanded 130 basis points to 14.5%. Marine Systems followed close behind: revenue grew 10.4% and operating earnings rose 17.5% on a 40-basis-point margin gain, with NASSCO and Bath Iron Works outpacing Electric Boat in percentage growth for the first time in CEO Phebe Novakovic’s tenure.
Combat Systems and Technologies did not share in that momentum, each posting margin compression even as revenue grew. Combat Systems revenue held roughly flat while earnings slipped $6 million to $318 million and margin compressed 30 basis points to 13.9% on unfavorable mix. Technologies margin fell 20 basis points to 9.4% despite revenue growth of 4.1%. Orders, though, told a stronger story: Combat Systems booked a 2.1x book-to-bill, and the company closed the quarter with a record $136.5 billion backlog, up 32% from a year ago, plus $186.9 billion in total estimated contract value once options and IDIQ awards are included.
That order strength is already showing up in cash. General Dynamics generated $1.9 billion of operating cash flow in the quarter and more than $4 billion over the first half, a free cash flow conversion rate above 150% through June. CFO Kim Kuryea addressed the trajectory directly on the Q2 earnings call: “Given our strong cash performance so far, we now expect a free cash flow conversion rate a little north of 100% of net income for the year, let’s say, around 105%.” That cash strength, plus the backlog visibility, gave management room to raise full-year EPS guidance to a range of $16.80 to $16.90, up from April’s $16.45 to $16.55 and January’s original $16.10 to $16.20.
TIKR Values GD Stock at $504, Pricing In Sustained Backlog-Driven Growth
TIKR’s mid-case model values General Dynamics at $504 by December 2030, implying 32% total return from the current price of $383, or 6% annualized over 4.4 years.
That mid-single-digit annualized return marks GD stock as a steady compounder built on execution, not a re-rating bet.
The target is reachable because the backlog already funds it: a record $136.5 billion in orders and a 1.4x book-to-bill give General Dynamics revenue visibility most industrial companies do not have, and the raised EPS guide of $16.80 to $16.90 shows that visibility is already converting into earnings. With free cash flow conversion running above 150% through the first half, the balance sheet has the capacity to keep funding the capital expenditures behind Marine’s growth without diluting shareholders or over-levering.
Should You Invest in General Dynamics Corporation?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
