Value Recognition For Archer's eVTOL: Analyst Points To Growing Case For Valuation Parity With Peer

Benchmark analyst Josh Sullivan reiterated a Buy rating on the shares of Archer Aviation Inc ACHR with a price target of $12.

Archer’s status as a leading channel to commercialize eVTOL’s took a giant leap forward last night as Boeing Co BA became both a strategic partner and investor in Archer as part of a $215 million investing round, said the analyst.

Earlier this month, Archer entered into two new contracts with the Air Force totaling $142 million in value. The analyst noted that these contracts represent the largest dollar value contracts in the eVTOL industry for defense partnerships.

The FAA also granted Archer’s eVTOL Midnight aircraft Special Authorization to conduct flight testing, and delivery of the first Air Force Midnight eVTOL was accelerated for year-end, noted the analyst.

This is a major step and confirms the aircraft has successfully met all FAA requirements to begin flight testing in the coming weeks, the analyst observed.

So, the analyst believes that Archer has gained significant validation from Boeing, the Air Force, and the FAA in short-order.

The analyst said though the $12 price target is maintained, ACHR closest eVTOL peer, Joby Aviation JOBY, trades at double ACHR’s valuation.

Therefore, given the flurry of recent endorsements for ACHR’s eVTOL approach, the case for valuation parity with JOBY is growing, concluded the analyst.

Price Action: ACHR shares are trading lower by 5.93% at $5.49 on the last check Friday.