General Dynamics Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Deutsche Bank Research Myles Walton myles.walton@db.com
Wolfe Research Hunter K. Keay hkeay@wolferesearch.com
Credit Suisse Robert Spingarn robert.spingarn@credit-suisse.com
Guggenheim Securities Roman Schweizer roman.schweizer@guggenheimpartners.com
RBC Capital Markets Robert Stallard robert.stallard@rbccm.com
CRT Capital Group Peter Arment peter.arment@bernstein.com
Bernstein Research Douglas S. Harned douglas.harned@bernstein.com
Cowen & Company Cai von Rumohr cai.von-rumohr@cowen.com
Wells Fargo Securities Sam J. Pearlstein sam.pearlstein@wellsfargo.com
Stifel Nicolaus Joseph W. DeNardi denardij@stifel.com
Jefferies Howard A. Rubel hrubel@jefferies.com
Buckingham Research Richard Safran rsafran@buckresearch.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form

Net Operating Profit Less Adjusted Taxes NOPLAT  2,716  2,801 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 1,930 1,806 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS (61) 27 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC  19,552 20,026 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC  13.89% 13.99% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv  (1,570) 928 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR  -57.81% 33.13% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket  23.18%  19.72% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook    9.01%  8.24%
Enterprise value
EVMarket  43,513  53,636 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook   43,105  52,870
Long-Run Growth
g = IR x ROIC
 -8.03%   4.63% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP    2.50%   2.50%
Margin from Operations M  13.28%  13.74% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D   10.34%  9.53% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution

12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 1.38  1.71  30.76%  23.14%  26.03%  20.99%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

9.34 11.26 30.76% 23.14% 26.03% 20.99%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

16.02 19.15 30.76% 23.14% 26.03% 20.99%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

22.55 29.70 30.76% 23.14% 26.03% 20.99%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

10.41 12.45 30.76% 23.14% 26.03% 20.99%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

 2.23  2.26 30.76% 23.14% 26.03% 20.99%

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