Shares of AeroVironment Inc. jumped Monday after a Goldman Sachs analyst upgraded the stock, suggesting the maker of unmanned aerial drones and charging systems for electric cars will be boosted by more orders and a potential business combination.
THE SPARK: Analyst Noah Poponak raised the stock to “Buy” from “Neutral” and increased his earnings estimates through 2014. He also upped his price target to $38 from $32, reflecting his belief that the company could be an acquisition target.
THE ANALYSIS: Poponak said he expects other analysts to raise their earnings estimates for AeroVironment this year as its growth potential becomes clear. The analyst doesn’t think his peers’ estimates reflect strong defense budget funding for unmanned aircraft systems. That sector is growing while defense budgets as a whole are being cut back.
Source: sUAS News