Draganfly Inc. (DPRO) PT Raised to $7 at H.C. Wainwright

H.C. Wainwright analyst Scott Buck raised the price target on Draganfly Inc. (NASDAQ: DPRO) to $7.00 (from $5.00) while maintaining a Buy rating.

The analyst commented: "Since reporting 3Q24 operating results on November 14, 2024, DPRO shares have increased 65.0% versus a 4.0% decline in the Russell 2000 index. Outperformance, in our view, is largely driven by recent military contract wins within the UAV industry. This includes Red Cat Holdings, Inc. (RCAT; not rated) subsidiary Teal Drones being selected as the U.S. Army’s Short Range Reconnaissance Program of Record in mid-November. This program is believed to generate as much as $270.0M of total revenue to Red Cat, versus just $16.4M of total revenue over the past twelve-month period. New contract announcements within the industry, especially from military customers highlight the important role UAVs are likely to play in future warfighting efforts. While these larger military contracts have not yet materialized for Draganfly, continued contact with the Department of Defense and a small purchase order for its Commander 3XL drone announced in September are positive signs. Draganfly management, on more than one occasion, has suggested the company is aligned to win military contracts driving annual revenue at multiples of current levels. These new larger purchase orders are expected in early 2025, which in our view are likely to drive DPRO shares meaningfully higher. Despite recent share appreciation, valuation levels still lag peers, just 2.0x 2025 revenue estimates versus between 5.0x and 8.0x for peers. This suggests some catch-up is likely should the company begin to announce new contracts. As new contract announcements are likely to coincide with more investor eyeballs on the space, we believe DPRO shares are positioned to move meaningfully higher. While we are not making changes to our estimates today, we are increasing our price target on DPRO shares to $7 from $5."

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