AeroVironment (AVAV) Stock Jumps Following Raymond James Upgrade After 55% Decline

Key Takeaways

• AVAV received an upgrade from Raymond James, moving from Market Perform to Outperform with a $210 target price
• Shares increased 2% Thursday following a devastating 55% decline since March, ending Wednesday at $141.22
• AeroVironment is in talks with the U.S. Army regarding the Enduring High Energy Laser (E-HEL) program, valued at approximately $500M
• Analysts project funded backlog may grow nearly 20% sequentially, strengthening revenue outlook through fiscal 2027
• Analyst consensus holds at Strong Buy: 15 Buy ratings, 2 Hold ratings, with average target of $225.50 — suggesting ~60% potential upside

Shares of AeroVironment (AVAV) advanced 2% Thursday following an upgrade from Raymond James, which established a $210 price objective. This comes after shares plummeted 55% from their March highs, ending Wednesday’s session at $141.22.

AeroVironment, Inc., AVAV

Five-star analyst Brian Gesuale initiated the upgrade, raising his stance on AVAV from Market Perform to Outperform. Gesuale believes the prolonged decline has created an attractive entry point with favorable risk/reward dynamics.

“With bookings beginning to inflect, backlog positioned to resume growth, and consensus expectations now significantly de-risked, we believe the risk/reward has turned decisively positive,” Gesuale stated.

Estimates for forward EBITDA have been reduced by approximately 15% during the last six months. According to Gesuale, this adjustment has substantially reset market expectations to more realistic levels.

Worries surrounding the SCAR program—which previously impacted production revenue and EBITDA margin growth—have been largely addressed, the analyst noted.

Major Contract Opportunities Could Restore Backlog Growth

The U.S. Army announced this week it’s negotiating with AeroVironment regarding the Enduring High Energy Laser (E-HEL) program. Raymond James believes this agreement could total approximately $500 million.

Additionally, AeroVironment recently won the Domestic Shield IDIQ contract vehicle, which Gesuale estimates at comparable value. Both opportunities strengthen AeroVironment’s competitive standing in counter-UAS and Directed Energy markets alongside BlueHalo.

Gesuale anticipates the funded backlog will show its first sequential growth in more than a year, potentially rising nearly 20% from the previous quarter. This improvement would provide significantly better revenue visibility extending into fiscal years 2027 and 2028.

Raymond James’ internal EBITDA projections for those fiscal years exceed Wall Street consensus by roughly 10%, suggesting potential for additional analyst upgrades as contract wins translate into revenue.

Emerging platforms such as the P550 and Red Dragon are also demonstrating solid adoption rates, while international market demand strengthens, further supporting the recovery narrative.

Wall Street Maintains Bullish Outlook Despite Some Target Reductions

Not all analysts are raising their forecasts. Bank of America’s Ronald Epstein reduced his price objective to $225 from $450. Canaccord Genuity’s Austin Moeller lowered his target to $240 from $280. Citizens JMP’s Trevor Walsh adjusted to $230 from $350.

These target reductions indicate more conservative growth assumptions, yet all analysts maintained their Buy recommendations. The overall Wall Street consensus remains firmly at Strong Buy, supported by 15 Buy ratings against only 2 Hold ratings.

The consensus AVAV price target stands at $225.50, representing approximately 60% upside potential from Wednesday’s closing price of $141.22.

The post AeroVironment (AVAV) Stock Jumps Following Raymond James Upgrade After 55% Decline appeared first on Blockonomi.