Morgan Stanley Lowers PT on General Dynamics to $85

Morgan Stanley has lowered the price target on General Dynamics

from $90 to $85 in a report published today. In the report, Morgan Stanley writes, "Adj. EPS of $2.04 matched our $2.04 E and topped cons of $1.99 ex. a ~$0.36 charge at Jet Aviation. Revs of $9.1B were shy of MSe and cons of $9.3B driven by declines at Combat and IS&T. Strength in Aero was highlighted by GD's $6B Aero order book, best since '08. Mgmt's 2012 revs and EPS guidance of ~$33.2B and $7.10-7.20 came in well below cons of $34B and $7.57 and our $35B and $7.85 driven by conservative top-line (Aero), margin (all segments), and buyback assumptions. We view GD's guide to be the Bear Case vs. the most probable case." Morgan Stanley maintains its Overweight rating on General Dynamics, which is currently trading down $0.26 from yesterday's $71.57 closing price.