UPDATE: Stifel Downgrades AeroVironment (AVAV) to Hold

January 14, 2021 11:35 PM EST
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Price: $84.22 -0.21%

Rating Summary:
    8 Buy, 10 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 5 | New: 36
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(Updated - January 15, 2021 5:30 AM EST)

Stifel analyst Joseph DeNardi downgraded AeroVironment (NASDAQ: AVAV) from Buy to Hold with a price target of $120.00 (from $103.00).

The analyst comments "AeroVironment announced yesterday that it agreed to acquire Arcturus UAV for $405M to be paid with $355m in cash and $50m in stock. The deal primarily expands AVAV's presence into the larger Group 2 and 3 unmanned aerial system market. We view the transaction favorably given what appears to be attractive valuation against a sound strategy tied mainly to revenue synergies. Further, this is the first time since AVAV IPO'd in 2007 where it has significantly deployed its balance sheet for M&A which we believe speaks to the confidence it has in its business, organically, going forward along with being able to expand into higher-dollar areas of the UAV market. Our bias on the company remains positive; however, we see today's stock reaction as creating a more balanced risk/reward outlook. Valuation increased today from ~5x FY1 sales (vs. prior 12 month average of ~4x) to 6.5x."

For an analyst ratings summary and ratings history on AeroVironment click here. For more ratings news on AeroVironment click here.

Shares of AeroVironment closed at $96.17 yesterday.

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