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Jan 26 (Reuters) - Morgan Stanley lowered its rating on defense contractor General Dynamics (GD.N) to "equal-weight" from "overweight," citing signs of a deeper cut in business jet deliveries in 2009 and 2010.
"The business jet environment appears to be headed for a descent back to the dreary 1970's," analyst Heidi Wood said in a note to clients.
The company's normally bulletproof Gulfstream unit, which makes business jets, is not immune considering the extended global reach of this downturn, Wood added.
"While 2009 is challenging, we believe 2010 could be the trough year in the cycle, absorbing the full impact of this recession."
Further, General Dynamics shares are already selling at a discount to the average of its defense peers, even after a cut in 2010 earnings estimate, the analyst noted.
Shares of the company were trading up nearly 2 percent at $54.29 in morning trade on the New York Stock Exchange. (Reporting by Dhanya Ann Thoppil in Bangalore; Editing by Anil D'Silva)