Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Canaccord Genuity maintained a positive outlook on Vertical Aerospace Ltd. (NYSE:EVTL) stock, reiterating a Buy rating and a price target of $13.50. With the stock currently trading at $4.84, analyst targets range from $2.05 to $15.40. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model. The firm’s analyst highlighted the company’s ongoing advancements in its aircraft development and its strategic planning for expansion.
Vertical Aerospace is progressing with preparations for manned flight tests of its third VX4 aircraft. While InvestingPro data shows the company holds more cash than debt, it’s rapidly burning through its reserves. The analyst noted this as a key step forward for the company, which aligns with its broader objectives. Additionally, the development of a military variant of the VX4 is seen as bolstering the company’s organic growth prospects, as laid out in its Flightpath 2030 plan.
The $13.50 price target set by Canaccord Genuity is based on a discounted cash flow (DCF) analysis projecting through 2035. This valuation also factors in assumptions regarding future capital raises that the company may undertake. With an InvestingPro Financial Health Score of 1.73 (labeled as "Weak") and negative EBITDA of $85.73 million, these capital raises may be crucial. Despite the anticipation of another capital raise, the analyst believes that the company’s current progress and plans provide a solid foundation for growth.
Vertical Aerospace’s Flightpath 2030 plan outlines the company’s vision for the future, including the expansion of its flight envelope in the year 2025. The plan is a comprehensive strategy that aims to capitalize on the growing demand for electric vertical takeoff and landing (eVTOL) aircraft and to explore potential military applications.
The company’s stock price is influenced by its milestones and strategic initiatives, such as the upcoming manned flight tests and the development of the military VX4 variant. Recent market response has been positive, with the stock posting a significant 17.48% return over the past week. These factors contribute to Canaccord Genuity’s continued confidence in Vertical Aerospace’s stock. Discover more insights and 13 additional ProTips for EVTL with a subscription to InvestingPro.
In other recent news, Vertical Aerospace has announced several key developments that may interest investors. The company has maintained its Market Perform rating from Raymond (NSE:RYMD) James, despite launching a new hybrid-electric VTOL program aimed at expanding its market reach. This program is set to undergo flight testing in 2026. Vertical Aerospace has also deepened its partnership with Honeywell (NASDAQ:HON) to accelerate the certification of its VX4 aircraft, aiming for a stringent safety standard that aligns with commercial airliners. This collaboration could potentially lead to a contract value of approximately $1 billion over the next decade.
Additionally, Vertical Aerospace has added three experts to its Board of Directors to enhance its financial and commercial strategies, with a goal of achieving cash break-even by 2030. The company has also adopted the Combined Charging Standard (CCS) for its VX4 aircraft, aligning with industry peers to establish a universal fast-charging infrastructure for eVTOLs. In a move to strengthen its flight test capabilities, Vertical has hired former Volocopter pilot Paul Stone, who brings extensive experience in experimental and developmental flight testing. These developments come as Vertical Aerospace progresses towards the certification and commercialization of its eVTOL aircraft, with approximately 1,500 pre-orders from global customers, including American Airlines (NASDAQ:AAL) and Japan Airlines.
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