AeroVironment upgraded to Outperform at Baird; shares hit 29-month high

AeroVironment (NASDAQ:AVAV) on Wednesday was upgraded to Outperform from a previous investment rating of Neutral by analysts at financial services firm R.W. Baird. They said the maker of combat drones and robotic systems is poised for gains after raising its sales and profit outlook.

“Management continues to expect backlog to build throughout fiscal-year 2024 tied to growth in loitering munition systems (LMS) and unmanned systems (UMS), setting up favorable growth well into mid-decade,” Peter J. Arment, senior research analyst at Baird, said in a September 6 report.

AeroVironment’s (AVAV) stock on Wednesday jumped as much as 30% to $124.33 a share, the highest since March 2021, a day after management provided an upbeat forecast for the remainder of the fiscal year. Major U.S. stock indexes declined during the day.

Source: AeroVironment

The company yesterday raised its revenue estimate to a range of $645 million to $675 million, up from $630 million to $660 million for fiscal-year 2024. It also forecast a profit of $51 million to $59 million, up from $50 million to $58 million previously.

AeroVironment (AVAV) swung to a profit of $21.9 million, or $0.84 a share, from a loss of $8.4 million, or $0.34 a share, a year earlier. Adjusted EPS of $1 beat the consensus estimate of $0.30.

Baird raised its price target for AeroVironment (AVAV) to $128 a share from $95 a share, based on a multiple of 25 times estimated Ebitda, up from 20 times previously for fiscal 2024.