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On Friday, Canaccord Genuity increased its price target on Archer Aviation Inc. (NYSE:ACHR) shares to $13.50, up from the previous $13.00. The firm maintained its Buy rating on the company’s stock. Canaccord Genuity’s analyst Austin Moeller highlighted Archer Aviation’s strong positioning in the emerging urban air mobility (UAM) market, particularly noting its potential to be among the first, if not the first, eVTOL (electric Vertical Takeoff and Landing) designs to receive passenger certification for UAM routes. With analyst targets ranging from $4.50 to $15.00, InvestingPro data shows the stock currently trading at $7.92, having delivered an impressive 132.94% return over the past six months despite its characteristic high volatility.
Moeller praised Archer Aviation’s management for its innovative approach to expanding the company’s total addressable market (TAM) through strategic partnerships, such as the one with Anduril on defense programs. According to the analyst, Anduril is handling the intricate ITAR work for the Department of Defense, while Archer Aviation focuses on providing the airframe and powertrain.
The analyst also expressed optimism regarding the company’s ability to secure contracts for pre-certification aircraft and hardware, which suggests that early adopters are committed to advancing UAM and are willing to invest in Archer Aviation’s offerings before certification. This move is expected to generate immediate revenue for the company.
Furthermore, Moeller pointed out Archer Aviation’s robust financial standing, citing the company’s $1.1 billion balance sheet (BS) and the additional $390 million forthcoming from Stellantis (NYSE:STLA). This capital strength underpins Archer Aviation’s capacity to pursue its business objectives and further solidifies its position in the UAM industry. InvestingPro confirms this financial resilience, highlighting that the company holds more cash than debt on its balance sheet, with detailed metrics available in the comprehensive Pro Research Report, along with 12 additional ProTips for deeper analysis.
In other recent news, Archer Aviation reported its financial results for the fourth quarter of 2024, highlighting a strong liquidity position with over $1 billion, despite facing a 22% increase in operating expenses compared to the previous year. The company’s non-GAAP operating expenses totaled $380.6 million for the year, while cash used in operations and investing activities amounted to $450.6 million. Archer Aviation is advancing its Midnight electric air taxi development and is targeting a commercial launch in 2025, with plans to deploy in the UAE and explore other international markets. The company has also entered into a significant partnership with Abu Dhabi Aviation as its first launch edition partner, planning to deploy aircraft in Abu Dhabi later this year. Additionally, Archer is developing a hybrid VTOL aircraft for defense applications in collaboration with Anduril, aiming to diversify its revenue streams. Analyst discussions during the earnings call focused on Archer’s FAA certification process and its efforts to accelerate commercialization through international partnerships. The company raised $820.4 million through financing activities in 2024, further strengthening its financial position.
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