5 Most Undervalued Defense Stocks to Buy According to Analysts

4. General Dynamics Corporation (NYSE:GD)

Forward P/E: 17.38

General Dynamics Corporation (NYSE:GD) secured a $196.55 million cost-plus-fixed-fee contract on April 24 to support engineering, technical design, and design transfer activities related to nuclear submarine capabilities and sustainment for foreign military sales programs. The contract includes optional extensions that could raise its total value to $930.41 million, with work scheduled through at least 2027 and potentially extending to 2031 if options are exercised. Funding is primarily sourced from foreign partners, underscoring strong international demand for U.S. submarine technology.

On April 8, Deutsche Bank downgraded General Dynamics Corporation (NYSE:GD) to Hold from Buy and reduced its price target to $387 from $404, citing concerns over valuation. The firm noted that the stock now trades at a premium relative to the S&P 500 compared with its historical discount and warned that its relative growth advantage may gradually narrow over time.

General Dynamics Corporation (NYSE:GD) is a leading U.S. aerospace and defense contractor engaged in submarine construction, combat systems, business aviation through Gulfstream, and advanced defense technologies. The company is headquartered in Reston, Virginia, and traces its origins to 1952, with earlier historical roots extending back to 1899.

The latest contract win reinforces General Dynamics’ strong positioning in high-barrier, long-cycle defense programs with significant international demand. While valuation concerns may weigh on sentiment in the near term, sustained defense spending and multi-year contract visibility continue to underpin the company’s long-term earnings stability.