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Can Virginia-Class Submarine Demand Support General Dynamics' Growth?
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Key Takeaways
General Dynamics secured a $40M Navy order for 19 Virginia-class submarine hydraulic actuators.
Work runs through December 2040, giving GD long-term visibility into Navy submarine programs.
Virginia-class demand may support GD through new builds, components, upgrades and lifecycle support.
General Dynamics (GD - Free Report) continues to benefit from sustained demand for Virginia-class submarines and their critical components. Its Electric Boat business recently received a $40 million order from the U.S. Navy for 19 hydraulic actuators used on Virginia-class submarines.
The work will be performed in Groton, CT, and is expected to be completed by December 2040. The long completion timeline highlights the extended nature of the Navy’s submarine procurement and sustainment programs and provides General Dynamics with visibility into future work.
Hydraulic actuators are important components that support the operation of submarine systems. Continued procurement of such equipment reflects the Navy’s focus on maintaining the readiness and performance of its submarine fleet while supporting ongoing Virginia-class production.
The award also reinforces Electric Boat’s position as a key supplier to the Navy’s submarine programs. General Dynamics has extensive experience in designing, building and supporting nuclear-powered submarines, giving it a strong position in long-cycle naval programs.
Demand for Virginia-class submarines is expected to remain an important driver for General Dynamics as the Navy works to expand and modernize its undersea fleet. Along with new construction, the company can benefit from recurring orders for components, upgrades and lifecycle support.
Continued investment in submarine capabilities and related equipment could therefore provide General Dynamics with steady opportunities across its naval business over the long term.
Defense Stocks to Keep on the Radar
Growing investment in nuclear-powered submarines and naval modernization could also benefit other defense contractors with established undersea capabilities.
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls Industries supports the Navy’s submarine fleet through its Newport News Shipbuilding business, which participates in the construction and maintenance of nuclear-powered submarines.
Lockheed Martin (LMT - Free Report) : Lockheed Martin supplies advanced mission systems, sensors and weapons technologies for U.S. Navy platforms, supporting demand associated with the modernization and sustainment of the submarine fleet.
The Zacks Rundown for GD
Shares of GD have lost 2.5% in the past year compared with the industry’s 16% decline.
Image Source: Zacks Investment Research
The company's shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.56X compared with its industry’s average of 2.19X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GD’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
GD stock currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Can Virginia-Class Submarine Demand Support General Dynamics' Growth?
Key Takeaways
General Dynamics (GD - Free Report) continues to benefit from sustained demand for Virginia-class submarines and their critical components. Its Electric Boat business recently received a $40 million order from the U.S. Navy for 19 hydraulic actuators used on Virginia-class submarines.
The work will be performed in Groton, CT, and is expected to be completed by December 2040. The long completion timeline highlights the extended nature of the Navy’s submarine procurement and sustainment programs and provides General Dynamics with visibility into future work.
Hydraulic actuators are important components that support the operation of submarine systems. Continued procurement of such equipment reflects the Navy’s focus on maintaining the readiness and performance of its submarine fleet while supporting ongoing Virginia-class production.
The award also reinforces Electric Boat’s position as a key supplier to the Navy’s submarine programs. General Dynamics has extensive experience in designing, building and supporting nuclear-powered submarines, giving it a strong position in long-cycle naval programs.
Demand for Virginia-class submarines is expected to remain an important driver for General Dynamics as the Navy works to expand and modernize its undersea fleet. Along with new construction, the company can benefit from recurring orders for components, upgrades and lifecycle support.
Continued investment in submarine capabilities and related equipment could therefore provide General Dynamics with steady opportunities across its naval business over the long term.
Defense Stocks to Keep on the Radar
Growing investment in nuclear-powered submarines and naval modernization could also benefit other defense contractors with established undersea capabilities.
Huntington Ingalls Industries (HII - Free Report) : Huntington Ingalls Industries supports the Navy’s submarine fleet through its Newport News Shipbuilding business, which participates in the construction and maintenance of nuclear-powered submarines.
Lockheed Martin (LMT - Free Report) : Lockheed Martin supplies advanced mission systems, sensors and weapons technologies for U.S. Navy platforms, supporting demand associated with the modernization and sustainment of the submarine fleet.
The Zacks Rundown for GD
Shares of GD have lost 2.5% in the past year compared with the industry’s 16% decline.
Image Source: Zacks Investment Research
The company's shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.56X compared with its industry’s average of 2.19X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GD’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
GD stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.