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Investing.com - Goldman Sachs initiated coverage on AeroVironment (NASDAQ:AVAV) with a Buy rating and a $301 price target on Monday. The stock, which has surged 45% in the past week and is trading near its 52-week high of $285.99, has caught significant attention from analysts. According to InvestingPro data, AVAV commands a market capitalization of $12.66 billion.
The investment bank cited the Ukraine conflict as a catalyst that has "structurally changed the way war is fought," demonstrating how low-cost commercial technology can be effectively deployed by militaries with fewer resources.
Goldman Sachs highlighted AVAV’s Switchblade munition and Puma (OTC:PMMAF) uncrewed intelligence, surveillance, and reconnaissance (ISR) systems as products that saw significant use in Ukraine, providing a "proof of concept" that is now driving global demand.
The firm noted that AVAV is well-positioned to benefit from upcoming U.S. Department of Defense programs that have not yet been awarded, along with increased defense spending from international allies.
Goldman Sachs expects AeroVironment to outperform both the broader market and defense industry peers, with the resulting operating leverage driving "higher profitability and cash generation" for the company.
In other recent news, AeroVironment reported impressive fourth-quarter fiscal 2025 results, with revenue reaching $275 million, surpassing both Stifel’s estimate of $235 million and the consensus forecast of $243 million. The company’s EBITDA also exceeded expectations, coming in at $62 million compared to Stifel’s projection of $53 million. Following these results, Stifel reaffirmed its Buy rating and maintained a $240 price target on AeroVironment’s stock. Raymond (NSE:RYMD) James also raised its price target to $225 from $200, citing AeroVironment’s strong fiscal year 2025 close and favorable positioning after the BlueHalo merger.
Additionally, BTIG increased its price target for AeroVironment to $300 from $225 while maintaining a Buy rating, highlighting the company’s attractive valuation compared to its peers. William Blair reiterated its Outperform rating, noting reduced Ukraine exposure risk and strong growth prospects for AeroVironment. In terms of product development, AeroVironment’s Wildcat drone achieved key milestones in its development for the DARPA Early VTOL Aircraft Demonstration program, completing transitions from vertical take-off to forward flight. These developments reflect AeroVironment’s ongoing strategic advancements and market positioning within the defense technology sector.
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