Drone Maker Stock Flies On A Near-$1 Billion U.S. Army Contract; Analysts Cheer

AeroVironment (AVAV) surged Wednesday after winning a $990 million U.S. Army contract for its Switchblade “suicide” drones. Two analysts upgraded the drone maker.

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The Department of Defense announced Tuesday the nearly $1 billion hybrid (cost-plus-fixed-fee and firm-fixed-price) contract was awarded to AeroVironment. The contract is for “an organic, stand-off capability to dismounted infantry formations capable of destroying tanks, light armored vehicles, hardened targets, defilade and personnel targets.” The agreement runs through August 2029.

Following the contract news, Baird upgraded AeroVironment stock to outperform from neutral with a price target of 220, up from its previous 161. The firm wrote that the SwitchBlade contract “locks in visibility” for the product through 2029 and that it will enable significant inventory levels of the drone.

Meanwhile, Alembic Global also upgraded AVAV on Wednesday, handing the stock an overweight rating, up from a neutral designation. Alembic Global analyst Pete Skibitski has a 216 price target on AVAV.

AeroVironment Stock

AeroVironment stock jumped 9% to 193.86, hitting an intraday high of 211.44, during market action on Wednesday after gaining 0.2% to 177.76 on Tuesday. Shares have a 224 consolidation buy point. But investors could use a short-term high of 191.77 as an early entry.

Before Wednesday’s market open, the stock was down 0.4% in August.

AeroVironment Earnings Upcoming

AeroVironment makes drones used by the Air Force for research, and the company reportedly is the U.S. military’s top drone supplier overall. It also sells to NASA and developed an early model electric vehicle.

AeroVironment is also involved in missile production. The company manufactures Switchblade drones, which have been utilized in Ukraine since the beginning of Russia’s invasion, as well as Puma hand-launched recon drones.

The Arlington, Va.-based outfit reports fiscal 2025 first-quarter earnings and revenue on Sept. 4. Analyst consensus has Q1 EPS falling 38% to 62 cents with sales increasing 20% to $183.2 million, according to FactSet.

AeroVironment forecasts full-fiscal year earnings of $3.18-$3.49 per share, which would represent a 6%-17% jump vs. fiscal 2024. The company also projects 2025 revenue totaling $790 million-$820 million, up from $716.7 million in fiscal 2024.

AeroVironment stock has a 78 Composite Rating out of a best-possible 99. Shares also have an 89 Relative Strength Rating and a 52 EPS Rating.

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