Goldman Sachs began coverage of Archer Aviation (ACHR) with a Neutral rating and an $11 price target, pointing to an over 40% upside. Analyst Anthony Valentini notes that Archer uses a plan that sends about 80% of its parts to outside shops with strong skills. As a result, the plan cuts spending and helps speed the path to a clear stamp from the regulator. The move also trims the load on the team that builds the craft.
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However, the firm adds that this same plan limits the opportunity to increase margins from service work in later years. Archer is also set to step back from the craft operator path. The firm sees this as wise since that path requires a high spend and tight rules. Valentini writes that “this strategy has driven lower R&D spend and time to build an operational aircraft, but sacrifices the higher margin aftermarket opportunity in the medium term.”
Meanwhile, ACHR shares rose 4.01% on Friday, closing at $7.79. Still, the stock is down again in pre-market trading today, losing nearly 3% at the time of writing.
Room In Defense, But Early Stage
Valentini also looks at the start of Archer in the defense field. The firm sees hope in the link with Anduril. Even so, the note says there is still no clear path to gain from major deals with the U.S. Defense Department. As a result, the firm maintains its view and waits for more evidence. The analyst adds that “there are currently no programs of record from the DoD, and it is difficult to underwrite.”
Goldman Sachs also says Archer may have one of the strongest crafts in the field, based on lift and load. Still, the team prefers firms that earn more from work on parts and service. The note says the stock looks cheap when you line it up with peers, yet the firm stays cautious due to the slow path to gain from service work.
Overall, the view is cautious, despite the positive elements in Archer’s operations. The firm sees clear steps from Archer, yet it also sees limits from the plan to rely on outside shops for parts and the slow rise of its defense line.
Is Archer Aviation Stock a Good Buy?
Despite the stock’s steep decline in 2025, the Street’s analysts remain optimistic about the company’s prospects. Based on five recent ratings, Archer Aviation boasts a “Strong Buy” consensus with an average ACHR stock price target of $12.40. This implies a 59.18% upside from the current price.
