Archer Aviation’s (NYSE:ACHR) share price might be down by 50% on a year-to-date basis, but investors still hoping that just like its eVTOL (electric vertical take-off and landing) aircraft, the stock could be readying for lift-off.
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The company is advancing towards FAA certification for six of its Midnight aircraft, with the first three nearing final assembly and set for piloted flight tests before the end of the year. Additionally, Archer has obtained Part 145 repair station and Part 135 air carrier certifications, allowing them to begin commercial operations.
Archer is also coordinating with the FAA on compliance and type certification, targeting a U.S. launch of its aircraft in 2025, with plans to expand to India and the UAE by 2026, or possibly sooner.
Meanwhile, it has the backing of some big names; Stellantis has invested approximately $300 million in the company, with another $400 million anticipated to follow, and United Airlines has invested around $25 million and made a $10 million pre-delivery payment (PDP) as part of a $1.5 billion purchase agreement for the first 100 units.
H.C. Wainwright analyst Amit Dayal says the company’s “impressive roster of strategic investors, customers, and partners” places Archer in an excellent position to “accelerate commercial ramp once formal flight operations can commence.”
In addition, the analyst suggests the stock’s decline may reflect a market preference for revenue and cash flow growth. However, given the significant revenue and margin potential ahead, Dayal believes the stock is still “underappreciated.”
“We believe investors may be overlooking the fact that the company is nearing operational launch and could scale revenues and cash flows at a quick pace given the significant customer enthusiasm for eVTOLs,” Dayal went on to say.
Dayal is bullish indeed. Along with a Buy rating, his $12.5 price target factors in 12-month returns of a big 308%. (To watch Dayal’s track record, click here)
Canaccord analyst Austin Moeller also takes a bullish stance, highlighting that Future Flight Global’s August order of 116 Midnights brings Archer’s backlog to a total of $5.71 billion (or 1,141 aircraft).
“ACHR continues to make exceptional progress with its full-scale aircraft, A&D supply chain, and backing of Stellantis, United and Boeing,” Moeller further commented.
Moeller also notes that according to the company, the SFAR (Special Federal Aviation Regulation) detailing operational requirements for Advanced Air Mobility is anticipated to be released by the end of October. “If this timeline is met, we view this as a significant positive catalyst for Archer and other US eVTOL companies,” Moeller opined on the matter.
To this end, Moeller also rates the shares a Buy, with a $7.5 price target that suggests shares will climb 140% higher over the next 12 months. (To watch Moeller’s track record, click here)
And what about the rest of the Street? With an additional 3 Buys, the stock naturally claims a Strong Buy consensus rating. The average price target clocks in at $10, suggesting returns of ~227% will be heading investors’ way in a year’s time. (See ACHR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
