General Dynamics Corp. (GD, Financial) is hitting turbulence. RBC Capital Markets just downgraded the stock from "Outperform" to "Sector Perform," slicing its price target to $290. The culprit? Gulfstream's sluggish delivery pace. The iconic private jet maker, known for its status-symbol aircraft, has fallen short of delivery expectations, forcing analysts to temper their aerospace margin forecasts through 2026. General Dynamics is now trading at $262 near its 52-week low of $247.36, as Wall Street wrestles with concerns about the company's near-term profitability.
This isn't just about jets. Broader defense sector headwinds are adding to the pressure. With defense policy in limbo, especially under the shadow of a potential “Trump 2.0” administration, analysts are cautious about where military spending is headed. Still, GD isn't without its bright spots. The company's portfolio includes lucrative defense contracts like the $5.7 billion in new Navy shipbuilding funds—covering everything from submarines to combat ships. But even these wins can't fully offset fears of delayed cash flows and slimmer margins, as reflected in a string of downgrades from Jefferies, Goldman Sachs, and Wolfe Research.
Here's the deal: General Dynamics has a rock-solid foundation, bolstered by a 46-year streak of consistent dividends and a historically steady beta of 0.6. But the road ahead looks bumpy. Gulfstream, once the crown jewel of private aviation, is losing some shine, and the defense segment isn't exactly firing on all cylinders. For investors, the big question is whether GD can weather these short-term storms and emerge stronger—or if the cracks in the armor signal deeper challenges ahead.
