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Investing.com - Needham initiated coverage on AeroVironment (NASDAQ:AVAV) with a Buy rating and a $300 price target on Tuesday. The stock, which has surged over 60% year-to-date according to InvestingPro data, currently trades near $247, with analysts’ targets ranging from $157 to $325.
The research firm cited the domestic unmanned aerial systems (UAS) market entering a "multi-year supercycle" driven by a shift in defense priorities toward autonomous unmanned platforms. This aligns with AVAV’s recent performance, as InvestingPro data shows revenue growth of 14.5% over the last twelve months.
Following its acquisition of BlueHalo, Needham believes AeroVironment has evolved into a leading next-generation defense prime positioned at the center of the fastest-growing technologies in modern warfare.
The company’s portfolio aligns with global defense spending initiatives, including the Trump administration’s $15 billion-plus defense unmanned spending increase, according to Needham.
AeroVironment is "uniquely positioned to see industry leading growth" due to expanding total addressable market, continued market share gains, and increasing manufacturing capacity, the research firm noted.
In other recent news, AeroVironment announced the completion of an additional public offering, raising $131.3 million through the sale of 529,234 shares of common stock. The company reported net proceeds of approximately $126.3 million from this transaction. In a separate development, AeroVironment has entered a strategic partnership with SNC to enhance missile defense capabilities, focusing on protecting critical infrastructure from aerial threats. Analyst firms have also weighed in on AeroVironment’s prospects, with Canaccord Genuity reiterating a Buy rating and setting a price target of $305.00. Meanwhile, Cantor Fitzgerald maintained an Overweight rating, with a higher price target of $335.00, using a valuation approach based on fiscal year 2028 estimates. These developments come amid a broader increase in drone production ordered by the Pentagon, which has spurred interest in drone-related stocks. AeroVironment’s involvement in this sector may be influenced by these directives.
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