Oil prices hold sharp losses with focus on secondary India tariffs
Wednesday - Canaccord Genuity has revised its price target on Archer Aviation Inc. (NYSE:ACHR) shares, reducing it to $13.00 from the previous $14.00, while retaining a Buy rating on the stock. The adjustment was announced after the firm took into account the potential dilution from a recent offering and an updated revenue forecast in their financial model. According to InvestingPro data, analyst targets for ACHR currently range from $4.50 to $15.00, with the stock showing significant momentum, gaining over 160% in the past six months.
In a statement, Canaccord Genuity analysts noted that their valuation model projects $500 million in drone revenue for Archer Aviation by 2030 and $1 billion by 2035. These figures are based on current market expectations but could be adjusted upward if the Trump Administration grants a formal program of record to the VTOL (Vertical Take-Off and Landing) aircraft that Archer is co-developing with Anduril for government RFPs (Requests for Proposals). InvestingPro analysis indicates the company maintains strong liquidity with a current ratio of 6.03, though it’s currently not profitable.
The analysts emphasized that while they anticipate the company’s primary revenue stream will continue to be OEM (Original Equipment Manufacturer) sales of passenger aircraft for Urban Air Mobility (UAM) applications, the market for drone sales should not be underestimated. They pointed out that the Total (EPA:TTEF) Addressable Market (TAM) for drone sales could be comparable to that of UAM travel, citing a $61 billion request for Department of Defense aircraft procurement in fiscal year 2025 versus an estimated $58 billion TAM for UAM travel by 2033. The drone sales are also expected to have a more favorable gross margin profile, which could help address what InvestingPro identifies as currently weak gross profit margins. With a market capitalization of $4.71 billion and a beta of 3.14, investors should note the stock’s high volatility characteristics.
The revised financial model reflects an increase in the terminal free cash flow estimate to $539 million, up from the previous model, and a total revenue outlook of $3.9 billion. Canaccord’s analysts have adjusted their expectations to include the impact of the dilution from the recent offering, which factored into the decision to lower the price target on Archer Aviation shares. For deeper insights into ACHR’s valuation and 12+ additional ProTips, access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Archer Aviation has raised $301.75 million through a registered direct offering, selling 35.5 million shares of its Class A common stock to institutional investors. This funding is set to bolster Archer’s financial position, supporting its operational goals and accelerating the development of its hybrid aircraft platform. Concurrently, Archer Aviation has made significant changes to its shareholder rights, converting its Class B Common Stock into Class A Common Stock, effectively equalizing voting rights among shareholders.
In analyst-related news, Needham reiterated a Buy rating for Archer Aviation, maintaining a price target of $11.00, while Canaccord Genuity increased their price target to $14.00, also maintaining a Buy rating. Both firms expressed confidence in Archer Aviation’s future prospects and its ability to execute its business plan effectively.
These developments underline Archer Aviation’s strategic financial decisions and its commitment to advancing next-generation aircraft manufacturing capabilities. The company’s recent financial moves and analyst ratings reflect the ongoing progress towards its objectives for 2025 and beyond.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.