Shares of AeroVironment (AVAV +2.00%) rose on Tuesday, following bullish analyst commentary.
By the close of trading, the drone stock's price was up more than 7%.
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A new bull sees solid returns for AeroVironment's shareholders
JPMorgan Chase analyst Seth Seifman initiated coverage of AeroVironment with a $320 price target. Seifman's forecast implies potential gains of more than 20% for investors based on the defense company's closing price on Tuesday.
NASDAQ: AVAV
Key Data Points
Seifman highlighted AeroVironment's strong growth prospects in military drones, counter-drone systems, and space technology. He believes the aerospace technology supplier stands to benefit from the Department of Defense's goal of bolstering domestic production of key armaments, including unmanned aerial vehicles (UAVs).
In turn, Seifman expects revenue in AeroVironment's autonomous systems division to grow by roughly 14% annually through 2030.
An urgent need for AeroVironment's defense tech
AeroVironment's drones are serving vital roles in the defense of Ukraine and other conflict areas across the globe. Its UAVs are thus in high demand among the U.S. military and its allies.
AeroVironment was awarded a $874 million contract in December by the U.S. Army Contracting Command to deliver unmanned aerial systems and counter-systems to allied and partner forces.
