Benchmark Maintains Buy, $38 Target on AeroVironment

Benchmark reiterates its Buy rating and $38 target on AeroVironment, Inc. AVAV as Q2 beat expectations on UAS revenue and better margins. Benchmark says, “Q2FY12 revenue and EPS were $80.4 million and $0.30 vs. guidance of $72-$78 million and $0.15-$0.25 in EPS, and consensus of $74 million and $0.20. Revenue was up 26%, driven by a 25% increase in the Unmanned Aircraft Systems (UAS) segment and a 32% increase in the Efficient Energy Systems (EES) segment. The operating margin of 11.9%, significantly better than our 8.5% estimate, from lower than expected SG&A expense.” AVAV closed at $31.88 per share on Tuesday.