US Military Procurement Plans To Affect The Demand For AVAV
Analysts at Morgan Keegan maintain their "market perform" rating on AeroVironment Inc (NASDAQ: AVAV), while reducing their estimates for the company.
According to Morgan Keegan, the US military’s budgetary plans indicate reduced demand for AeroVironment. “Total spending on Raven UAS and DDL upgrades of $70.1 million in FY 2011 (counting Army and Marine Corps purchases in the base and supplemental budgets) is down from $172.4 million in FY 2010,” the analysts say.
“While we believe AeroVironment has some significant opportunities ahead of it (notably Global Observer, Switchblade, and electric vehicle charging), we believe there is also a lot of risk associated with these projects, and growth will be uncertain going forward as Raven sales decline,” the analysts add. Morgan Keegan has reduced its EPS estimate for FY01 from $1.35 to $1.24.
