Blair starts General Dynamics at Outperform with potential 17% upside

William Blair analyst Louie DiPalma initiated coverage of General Dynamics with an Outperform rating and no price target. The analyst sees potential upside of at least 17% over the next 12 months. General Dynamics’ "multiple gap" with its defense systems provider should narrow as its revenue growth accelerates, the analyst tells investors in a research note. The firm says General Dynamics’ $132B Columbia submarine program is widely considered to be the most important program of the entire U.S. Department of Defense. As such, Columbia has the least budgetary risk of any Department of Defense program as the centerpiece of the U.S. nuclear triad deterrent strategy, contends Blair. It believes the company’s recent missteps on the Virginia-class submarine program and the Mission Systems’ supply chain constraints "present an opportunity to buy before the rebound."