Next-generation aircraft maker EHang Holdings (EH 1.32%) gained some altitude in Wednesday's stock trading session. The China-based company's American Depositary Receipts (ADRs) zoomed more than 3% higher on a prominent U.S. bank initiation of coverage. With that performance, EHang flew well above the S&P 500 (^GSPC 0.58%), which gained 0.1% on the day.
A major U.S. bank says "take a ride"
After Tuesday's market close, Bank of America Securities' Fiona Lang began formally tracking EHang stock. She's bullish on the company, as she tagged it with a buy recommendation at a price target of $26 per ADR. That anticipates upside of more than 30% on the company's most recent closing price.
Image source: Getty Images.
According to reports, Lang wrote that EHang is in a strong position in its native market, as it is the No. 1 electric vertical takeoff and landing (eVTOL) aircraft maker in the country. Compounding that, it has cutting-edge technology and several licensing deals in place.
The analyst also believes that numerous catalysts for growth exist, not least of which is the support the eVTOL industry should receive from local governments incentivized to push alternative transportation solutions. EHang should also benefit from clients in the tourism industry looking to implement such modes of transport for their businesses.
It's good to be the leader
China, with its immense population and crowded roads, is understandably hungry for new ways of ferrying around its people. eVTOL offers an elegant solution to this problem, and as the company leading the way with this technology, EHang should indeed benefit from both bottom-up demand and top-down support.
