General Dynamics' Marine Gains, Gulfstream Ramp to Support Multiyear Growth, Morgan Stanley Says

10:58 AM EST, 11/03/2026 (MT Newswires) -- General Dynamics' (GD) productivity gains in its Marine Systems segment and Gulfstream's delivery ramp are expected to support growth and margin expansion beyond 2026, Morgan Stanley said in a note Tuesday. The company delivered a strong beat-and-raise fiscal Q3, as it reported earnings of $4.49 on revenue of $14.57 billion, both above consensus. Management raised its full-year 2026 EPS guidance to a range of $17.20 to $17.30, from $16.80 to $16.90, and sales outlook to $56.5 billion to $56.8 billion, from approximately $55.7 billion, according to the note. Backlog more than doubled year-over-year to about $220.3 billion from $109.9 billion, with funded backlog growing approximately 30% to $111.8 billion from $85.7 billion, providing multiyear growth visibility, the investment firm said. Most unfunded backlog remains concentrated in Marine Systems and is subject to future budgets and appropriations, but Morgan Stanley said it was confident in the company's longer-term funding outlook as the Department of Defense continues to prioritize shipbuilding. Allied demand strengthens the growth outlook, with international business accounting for almost half of Combat Systems' portfolio and European Land Systems sales increasing about 28%, the investment firm said. Morgan Stanley kept an overweight rating on General Dynamics and raised its price target to $480 from $465. Price: 375.35, Change: +1.89, Percent Change: +0.51