Shares in military contractor General Dynamics Corp. rose to a fresh 52-week high Monday after Congress approved on Friday a supplemental spending bill with money earmarked for the company's main products.
Two analysts reiterated bullish forecasts on Monday, citing the budget approvals, helping General Dynamics shares rise $1.75, or 2.4 percent, to $73.42 in recent trading on the New York Stock Exchange. The stock reached as high as $73.59 earlier in the session, eclipsing its pervious year high
On Friday, Congress passed an additional $70 billion spending for Iraq and Afghanistan as part of a record Pentagon budget of $448 billion, which included new funding for General Dynamics' M-1 Abrams tank and Stryker armored vehicle programs.
Bank of America analyst Robert Stallard said General Dynamics, as part of the supplemental funding, will get $1.1 billion for its Abrams tank program, $82.1 million to replace Stryker vehicles destroyed in the wars and $25 million for vehicle armor.
Stallard also said the company's business jet unit, Gulfstream, should benefit from strong international demand.
He raised estimates for 2006 earnings to $4.20 per share from $4.17 and lifted his share-price target to $80 from $75.
Prudential Equity analyst Byron Callan boosted his 2008 earnings targets, citing a potential sale of M-1 tanks and Strykers to Saudi Arabia in addition to the approved Pentagon spending on General Dynamics' products.