Vertical Aerospace Is Flying Towards An Operational Inflection Point, Says Bullish Analyst

After participating in the Farnborough Air Show, Vertical Aerospace Ltd's EVTL shares were rising in midday trading on Tuesday.

Although the company has experienced setbacks over the past few years, an operational inflection seems possible in the next few quarters, "with management targeting a piloted full transition flight by year-end," according to Deutsche Bank.

The Vertical Aerospace Analyst: Edison Yu upgraded the rating for Vertical Aerospace from Hold to Buy, while raising the price target from $1.00 to $1.50.

The Vertical Aerospace Thesis: If the company achieves a full transition flight by year-end, this will represent a "highly capital efficient path thus far by an eVTOL upstart in terms of both cash and human capital," Yu said in the upgrade note.

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The flight test campaign, which looks "ready to ramp up in the coming quarters," will help management rebuild credibility, he added.

"While the company still needs to raise additional capital, we estimate the company has cash runway through 3Q25, supported by the investment from its founder, payments from Rolls Royce, and govt grants," the analyst wrote.

"Valuation-wise, pro forma cash represents +70% of the market cap and operational risks are fairly priced into the stock in our view," he further stated.

EVTL Price Action: Shares of Vertical Aerospace had risen by 7% to 95 cents at the time of publication on Tuesday.

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Image created using artificial intelligence via Midjourney.