Why Shares of General Dynamics Fell in March
Shares of General Dynamics (NYSE: GD) fell 17.1% in March, according to data provided by S&P Global Market Intelligence, double the declines experienced by defense rivals Lockheed Martin and Northrop Grumman. The culprit was not General Dynamics military operations but its Gulfstream commercial aerospace unit, which could find it hard to take off if the U.S. economy falls into a recession.
Gulfstream has long been an albatross weighing on General Dynamics' results, with the business jet industry never recovering from the 2008-2009 recession. But there were indications heading into 2020 that this could be the year that all of that changed, thanks to a combination of an aging corporate fleet, new models to entice buyers, and changes in depreciation rules in the tax code.
Gulfstream's G650 in flight. Image source: General Dynamics.
Source Fool.com
