Ducommun (DCO) Stock Forecast & Price Target

Ducommun is supported by strong 2Q26 execution, with revenue up 12%, gross margins at 28%, and a 68% surge in missiles, while 1Q26 also showed robust adj. EBITDA of $35.4M on 16.9% margins and 9% revenue growth. The outlook is anchored by high-content exposure to missile programs such as AMRAAM, SM-3/6, Tomahawk, THAAD, and PAC-3, plus a military and space backlog that ended 2025 at $707M, which should support growth over the next 3-5 years. In addition, the commercial aerospace business is benefiting from 16% growth, Boeing 737 MAX pull-forward, and better mix in Engineered Products, while management’s margin progress from about 20% in 2022 to 27% in 2025 suggests further upside from volume, pricing, and facility rationalization.

Ducommun is viewed negatively because much of the expected upside from missile, munition, defense electronics, and commercial aero ramps appears already reflected in valuation, limiting near-term multiple expansion. The outlook is further constrained by reliance on defense spending levels, legacy program funding, and FY27-FY28 budget uncertainty, while execution risks remain around hiring, production schedules, Boeing inventory work down, supply chains, and M&A. Even with management execution, downside scenarios imply only ~$970M of revenue and 17% adjusted EBITDA margins in 2028, with valuation pressure from lower multiples of 12.7x, 12x, or 10.1x.