Contracted to Boost Revenue Prospects
General Dynamics Corp.’s GD NASSCO business unit secured a $27 million contract for the planned incremental availability of the USS George H.W. Bush (CVN-77) aircraft carrier from the Mid Atlantic Regional Maintenance Center, Norfolk, VA. The work is projected to be completed by July 2024 in Norfolk, VA.
Nations globally are increasing defense spending on naval ships, benefiting major U.S. naval shipbuilders like General Dynamics. The company’s NASSCO unit is a leader in naval ship construction and maintenance, bolstering its competitive edge in the market. It is also currently working on important projects such as the Expeditionary Sea Base (ESB) and the John Lewis-class (T-AO-205) fleet replenishment oiler.
NASSCO’s robust capabilities in maintenance and surface-ship repair operations in key Navy fleet concentration areas enable it to win significant Navy contracts. Such contract wins are anticipated to continue boosting the company’s order book, leading to enhanced revenue generation prospects for General Dynamics.
Leveraging Market Growth Opportunity
The naval vessels market is expected to grow at a CAGR of 13.3% during the 2023-2028 period, opening new avenues for General Dynamics. As the demand for naval sea warfare capabilities rises, the company is well-positioned to capitalize on this trend. Other defense majors poised to benefit from the expanding naval vessels market include BAE Systems (BAESY), Lockheed Martin (LMT), and Huntington Ingalls Industries (HII).
Price Performance and Zacks Rank
General Dynamics’ shares have surged 11.8% in the past three months, outperforming the industry’s 0.6% decline. The company currently carries a Zacks Rank #3 (Hold).