Anytime a company or sector has a trillion-dollar market opportunity, it causes some excitement for investors. That’s what happened Thursday with a new analyst note on a company that went public via SPAC merger in 2021.
The Archer Aviation Analyst: JPMorgan analyst Bill Peterson initiated coverage on Archer Aviation Inc ACHR with an Overweight rating and a price target of $7.
The Analyst Takeaways: Peterson calls an investment in Archer an “early boarding opportunity for investors.”
Archer Aviation is one of several eVTOL (electric vertical takeoff and landing) companies that has gone public in the past two years.
Archer counts United Airlines Holdings UAL as a partner for future use of its eVTOL and Peterson sees other companies signing partnerships in the future.
“Archer is taking a pragmatic approach to aircraft design and commercialization, focusing on using proven components and partnering with key manufacturing partners,” Peterson said.
The analyst sees a large market opportunity that could be higher than the current market size for the helicopter sector with added noise and safety benefits.
“Longer-term, we expect Archer’s market opportunity to potentially reach $1T over several decades.”
The analyst said investing in eVTOL companies requires patience and still comes with high risks given the unproven business models and risks of certification.
“We believe Archer, with a stronger balance sheet than those of most peers, is well-positioned to execute on its strategy and overcome such obstacles and is undervalued relative to peers.”
ACHR Price Action: Archer shares were up 25.14% to $4.63 on Thursday at market close. Shares have traded between $2.61 and $10.72 over the last 52 weeks.
Photo: Courtesy Archer Aviation
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