BofA initiates EHang stock with Buy rating, $26 target

On Wednesday, BofA Securities commenced coverage on EHang Holdings (NASDAQ:EH), a leading name in the electric vertical takeoff and landing (eVTOL) aircraft market. The firm issued a Buy rating on the stock with a price target set at $26.00, representing potential upside from the current price of $19.24. With a market capitalization of $1.38 billion, EHang has garnered strong analyst support, with consensus targets ranging from $20.23 to $31.39. Fiona Liang, an analyst at BofA Securities, highlighted EHang’s dominant position in the Chinese eVTOL aircraft market, which is expected to be maintained over the next five years due to its advanced technology and early licensure advantages.

EHang’s EH216-S model, which can carry two passengers and is priced at RMB 2.4 million, boasts a cruising speed of 90 kilometers per hour. The company has demonstrated impressive commercial momentum, with revenue surging 288% in the last twelve months and maintaining strong gross margins of 61%. It notably received the Production Certificate (PC) from the Civil Aviation Administration of China (CAAC) in 2024 and currently stands as the only eVTOL model available for sale in China. Looking ahead, EHang is on track to secure the Type Certificate (TC) and Airworthiness Certificate (AC) for its VT-35, another passenger-grade pilotless eVTOL, with plans to begin deliveries in 2026.

The bullish stance from BofA Securities is further bolstered by potential catalysts including increased local government stimulus to support China’s eVTOL industry and the accelerated delivery to tourism operators that are incorporating eVTOL into their services. These factors are seen as key drivers that could enhance EHang’s market position and financial performance in the near future.

The initiation of coverage by BofA Securities comes at a time when the eVTOL sector is gaining significant attention for its potential to revolutionize transportation, especially in urban areas. EHang’s progress in securing necessary certifications and advancing its technology places it at the forefront of this emerging industry. According to InvestingPro, EHang maintains a "GOOD" overall financial health score, with particularly strong growth and cash flow metrics. Discover more insights and 12 additional ProTips about EHang’s financial outlook with an InvestingPro subscription, including detailed analysis in the comprehensive Pro Research Report.

In other recent news, EHang Holdings reported a substantial 190% increase in revenue for Q4 2024, reaching RMB 164.3 million, surpassing analysts’ forecasts. The company’s earnings per share (EPS) improved to -0.33, significantly better than the expected -0.83. EHang also achieved its first positive adjusted net income for the year. Deutsche Bank (ETR:DBKGn) upgraded EHang’s stock rating from Hold to Buy, though it lowered the price target to $20, citing China’s leadership in developing the eVTOL/UAM ecosystem. Jefferies initiated coverage of EHang with a Buy rating and a price target of $30.40, emphasizing the potential in the low-altitude economy. Additionally, EHang announced that recent U.S. tariffs on Chinese goods will not impact its operations, as the company does not export its autonomous aerial vehicles to the U.S. EHang’s strategic positioning and regulatory approvals from the Civil Aviation Administration of China (CAAC) for its eVTOL aircraft are expected to support increased production and order fulfillment.

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