General Dynamics shares rise on analyst upgrade

WASHINGTON (AP) — Shares of General Dynamics Corp. rose Wednesday after an analyst upgraded the defense contractor citing stability in its military business and improvement in the business-jet market.

The Falls Church, Va., company's stock was up $2.54, or 4.1 percent, to $65.09 in afternoon trading. Shares have traded between $35.28 and $68.84 over the last 52-week period.

Credit Suisse analyst Robert Spingarn lifted the company's stock rating to "outperform" from "neutral" and boosted his price target to $74 from $70.

"While General Dynamics has moved strongly off its March low, we think the market has yet to factor the stability in its defense programs in 2011-2012 coupled with potential strong recovery growth in aerospace in that time frame," Spingarn wrote in a note to clients.

The analyst said General Dynamics' is also likely to fare better than its peers in the evolving business jet market.

"We think the aerospace troughed in sales and margins in third quarter, and we see sequential improvement in earnings and orders going forward, with first signs likely from the newly expanded aftermarket business in 2010," wrote Spingarn.