On Friday, Baird adjusted its stance on AeroVironment (NASDAQ:AVAV), a company specializing in unmanned aircraft systems, shifting the stock rating from Outperform to Neutral. The firm set a new price target for the company's shares at $161.00.
This change comes after a notable increase in AeroVironment's stock value following the third quarter results of 2024, which Baird had previously identified as a Bullish Fresh Pick on February 12.
The stock has seen a significant rise, with a year-to-date gain of approximately 41% and an impressive 94% increase over the past 12 months. This performance stands in stark contrast to the S&P 500's 8% rise year-to-date and 29% over the same 12-month period. Despite the downgrade, the firm acknowledges the positive outlook for AeroVironment's backlog growth in 2024, citing upcoming projects such as Replicator, LASSO, and potential large Foreign Military Sales (FMS) for the Switchblade 600.
The analyst from Baird expressed a continued bullish perspective on the company's backlog growth prospects for the year, with several key projects on the horizon. However, the decision to downgrade reflects a belief that the current stock valuation fully encompasses these growth prospects.
AeroVironment's recent financial performance and the anticipation of future contracts have contributed to the stock's robust growth. The company's advancements in unmanned aircraft systems and potential new contracts, like those for the Switchblade 600, are expected to continue to support its market position.
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