UPDATE: Stifel Downgrades AeroVironment (AVAV) to Hold
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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."
Shares of AeroVironment closed at $96.17 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesStifel, Definitive Agreement, IPO
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