Broadpoint.Amtech Upgrades AeroVironment (AVAV) to Buy; Favorable Outlook for 2H10 & FY11 Results
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Broadpoint.Amtech upgrades AeroVironment (Nasdaq: AVAV) from Neutral to Buy. Price target $36.
Broadpoint analyst says, "We anticipate 2Q10 to be weak as managers have put off UAS purchases in anticipation of the Digital Data Link (DDL) upgrade. However, the DDL production upgrade cycle actually began in late 2Q10 (October) with the significant ramp expected throughout 2H10. Further, we believe that the operational tempo in Afghanistan highlights the critical need of the Raven UAS coupled with DoD funding that provides a compelling growth outlook for AVAV for the next several quarters...Given the increased combat tempo in Afghanistan and strong funding installments for Raven and DDL upgrades, the outlook looks favorable for 2H10 and FY11 results. While only a minimal amount of DDL work will fall in 2Q10, the expectation for ~1,000 Raven DDL systems by year-end leaves room for a significant ramp in 2H10...2Q10 Expectations: The consensus EPS estimate is $0.05 on revenue of $53 million vs. BP AmTech at $0.10 on revenue of $51.6 million...FY10 guidance is $292-$302 million on the top-line (18%-22% growth) and 12-14% operating margins. Assuming a 35% tax rate implies FY10 EPS of $1.04-$1.25 vs. consensus of $290 million and $1.09. Raven production is forecast at about 450-500 units, with 500 DDL upgrades."
To see more analyst ratings on AVAV Click Here.
AeroVironment, Inc. designs, develops, produces, and supports unmanned aircraft systems and efficient energy systems for various industries and governmental agencies.
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