William Blair sees AeroVironment trading higher amid drone exposure demand

William Blair analyst Louie DiPalma reiterated an Outperform rating on AeroVironment (AVAV) after the company confirmed last week its BlueHalo UES subsidiary had been awarded a $499M, eight-year research and development contract for the Air Force’s High-Performance Electromagnetic Spectrum Survivable Materials Advance Program. The firm said the program has strategic significance due to the increased prevalence of electronic warfare and microwave attacks in the space and land domains. Blair added that it is incrementally positive on AeroVironment following this and other strategic wins that reflect how the company is successfully diversifying its portfolio beyond its traditional Switchblade loitering munitions and Group 2 unmanned aerial systems leadership. The firm sees the shares over the next year trading higher due to the voracious appetite from investors for drone exposure as countries look to build unmanned systems inventories.