Analyst Ronald Epstein of Bank of America Securities reiterated a Buy rating on AeroVironment, retaining the price target of $450.00.
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Ronald Epstein has given his Buy rating due to a combination of factors that support AeroVironment’s long-term growth potential despite recent challenges. He acknowledges the company’s recent stock decline, largely tied to margin compression and delays in task order awards, but views this as an overreaction. Elevated demand for AeroVironment’s products, both domestically and internationally, remains a positive indicator for the company’s growth trajectory, particularly as the challenges are deemed transitory, such as integration hurdles from the BlueHalo acquisition and the impacts of a government shutdown.
Additionally, Epstein highlights the strong performance of AeroVironment’s SCDE products, notably within the C-UAS portfolio and the promising lead of its Locust Laser Weapon System and BADGER phased array antenna. While the margins have been temporarily pressured due to a mix shift and system upgrades, he anticipates margins to improve as these obstacles diminish and as key products mature. Overall, Epstein maintains confidence in AeroVironment’s ability to recover and excel, justifying his Buy rating and a price objective of $450.
Epstein covers the Industrials sector, focusing on stocks such as General Dynamics, Howmet Aerospace, and Aercap Holdings. According to TipRanks, Epstein has an average return of 19.3% and a 65.31% success rate on recommended stocks.
In another report released on December 12, Goldman Sachs also maintained a Buy rating on the stock with a $429.00 price target.