AeroVironment Inc.: Key defense contractor with a major military contract
AeroVironment Inc. $AVAV+2.3%, a leading U.S. defense contractor, has been awarded a significant five-year, $990 million contract by the U.S. Army to provide the Switchblade system. This contract comes at a time of growing demand for defense systems due to international tensions and geopolitical uncertainties. Switchblade, an innovative "loitering munitions" system, is a launchable and guided bomb that operators can precisely locate on targets.
Rising shares and positive analyst outlook
As a result of the order, the company's stock has risen 11.9% to $204.50, and is up 62% year-to-date. Six of seven analysts rate $AVAV+2.3%stock a "Buy," with an average target price set at $227, representing a further 11% upside.
Controversy surrounding the contract
Although competitors in the defense industry protested the award of this Army contract, the U.S. Army dismissed the protest and lifted the stop-work order, renewing positive market sentiment. Analysts, such as Greg Konrad of Jefferies, remain optimistic about future demand for the Switchblade and believe AeroVironment $AVAV+2.3% continues to be a key player in the defense sector.
Conclusion
With a strong military order book, rising revenues and positive analyst ratings, $AVAV+2.3%has the potential to continue its growth. This contract significantly strengthens the company's position in the US defense contractor community, making it an attractive investment for long-term investors.
The stock is too high right now and probably won't fall for a long time. I think $LMT+0.9% stock is much more interesting.
It's a fine sector and this contract is great. It confirms that the stock will continue to rise. The stock is pretty, high right now though, so a small price drop to buy would be nice.
Nice growth! I was especially interested in the name of the company :) Someone came up with a really good idea.
It's an interesting contract and an attractive stock it probably is, but it looks pretty expensive on the chart right now.