Analyst Peter Arment of Robert W. Baird maintained a Buy rating on AeroVironment, with a price target of $152.00.
Peter Arment has given his Buy rating due to a combination of factors affecting AeroVironment’s business dynamics. The company is expected to surpass earnings per share (EPS) estimates for the third quarter, bolstered by strong sales growth supported by additional Switchblade 600 shipments. Management’s confidence in achieving a significant increase in top-line growth and robust EPS for the fiscal year is underpinned by solid orders in both the Lethal Miniature Aerial Missile System (LMS) and Unmanned Missile System (UMS) segments.
Furthermore, recent contract wins for Switchblade 600 on military programs and a substantial Foreign Military Sales (FMS) award have not been fully factored into current guidance, presenting an upside potential.
Additionally, the demand for the Switchblade 600 is on an upswing, with expectations of sustained double-digit revenue growth extending into future fiscal years. This growth trajectory is fueled by key defense initiatives and international FMS activities. The favourable gross profit margins associated with the production of Switchblade 600, along with anticipated improvements in production efficiency, further solidify the financial outlook.
Near-term catalysts, such as the Replicator and LASSO programs, are set to drive increased production volumes, thereby strengthening the company’s revenue and EPS projections for the fiscal year.
Source: Business Insider