Bank of America on Monday issued a company update on General Dynamics Corporation GD after news that the Board of Directors authorized a share repurchase of up to 10 million shares. General Dynamics is currently rated as a Buy with a one year price target of $165.00.
Analysts Ronald Epstein and Kristine Liwag wrote, "GD is more than a defense contractor, with solid returns from Gulfstream in business aviation...Strength in Gulfstream, particularly in large cabin jets, should offset weakness in defense. A strong balance sheet and cash flow generation should ensure continued incremental M&A in defense and commercial markets, as well as share buy-backs."
Bank of America also highlighted risks for investing in General Dynamics:
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- 2. Weakening strength of the U.S. dollar
- 3. Decline in the US defense budget
- 4. Poor execution on defense programs which will hurt the company's profit margins
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