Latest news with #eIPP
Business Insider
10 hours ago
- Business
- Business Insider
‘Padding the Coffers Ahead of Lift Off,' Says Canaccord About Archer Aviation Stock
Archer Aviation (NYSE:ACHR) may have ruffled some feathers with news of dilution, but raising capital is often a necessary step – especially, pardon the pun, for companies looking to get projects off the ground. Confident Investing Starts Here: As it prepares to participate in the White House's newly announced eVTOL Integration Pilot Program (eIPP), Archer last week announced an $850 million private placement. It raised $817.1 million in net proceeds by selling 85 million shares of Class A common stock to institutional investors at $10 per share. The offering should lift Archer's cash reserves to around $1.8 billion – among the highest in the industry – based on its 1Q25 ending balance. The new funds are expected to support accelerated manufacturing and certification efforts tied to the eIPP. Canaccord analyst Austin Moeller thinks Archer's 'timely capital infusion' underscores the significance of Trump's executive order aimed at fast-tracking eVTOL deployment in the U.S. The eIPP, a key provision within the Unleashing American Drone Dominance EO, establishes a training program to showcase five U.S.-based eVTOL or UAM (urban air mobility) projects on an 'accelerated timeline' ahead of the 2028 LA Olympics. The Department of Transportation has 180 days to select the five aircraft designs. While dilutive and likely to raise questions about cash use, Moeller points out that the capital raise 'financially positions Archer Aviation to be a leader in US eVTOL aircraft deployment at key US airports (Newark, Chicago O'Hare) via the eIPP, in addition to providing a substantial capital backstop as manufacturing operations ramp in Covington, GA, for both commercial eVTOL passenger aircraft and hybrid-VTOL tactical drones.' With an estimated FY25 cash burn of around $466 million, Archer now has a 'significant runway' to scale up manufacturing over the next few years, which should also pave the way for revenue or cash deposits from its international 'Midnight Launch Edition' program. Meanwhile, on Monday Archer announced that it has partnered with PT. Industri Ketahanan Nasional (IKN) to deploy an initial fleet of its Midnight aircraft in Indonesia, the third country tapped for its 'Launch Edition' program. Archer has previously announced Launch Edition deployments in the UAE through a partnership with Abu Dhabi Aviation, and in Ethiopia via Ethiopian Airlines. Against this backdrop, Moeller rates ACHR shares a Buy, although to account for the equity dilution, his price target goes from $13.5 to $13. Still, there's a potential upside of 25% from current levels. (To watch Moeller's track record, click here) 3 other analysts also take a bullish stance on ACHR and with an additional 2 Holds, the stock claims a Moderate Buy consensus rating. The average target clocks in at $11.75, implying shares will post growth of 13% in the months ahead. (See ACHR stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Business Insider
a day ago
- Business
- Business Insider
Archer Aviation Stock (ACHR) Slips 14%, Yet Analyst Expects 30%+ Upside on eVTOL Plans
Archer Aviation (ACHR) stock took a sharp hit on Friday, with shares sliding 14% after the company announced an $850 million stock offering priced at $10 per share. The deal is expected to bring in $817.1 million in net proceeds and is set to close on June 16, 2025. While the fresh capital will help fuel Archer's growth and aircraft certification efforts, the share dilution clearly weighed on investor sentiment. In response to the funding news, Canaccord Genuity analyst Austin Moeller reaffirmed his Buy rating on Archer but trimmed the price target slightly from $13.50 to $13.00. The new price target implies over 30% upside potential. Confident Investing Starts Here: The announcement comes on the heels of new executive orders from President Donald Trump to implement an eVTOL (electric vertical takeoff and landing) Integration Pilot Program (eIPP) in the United States. This initiative aims to speed up the rollout of eVTOL aircraft in the U.S. Analyst Backs Archer's eIPP Bid Moeller called the $850 million raise an important move to help Archer take part in the eIPP. This new U.S. government program will support five electric aircraft projects, with the goal of getting them ready to operate before the 2028 Olympic Games in Los Angeles. According to the analyst, Archer's quick action to raise funds shows its clear intent to take part in this eIPP initiative. He believes this extra capital will help the company speed up production and move through the aircraft certification process—both of which are crucial for meeting the program's tight timeline. With this funding round, Archer's total cash balance is expected to rise to around $1.8 billion, based on its first-quarter 2025 figures and past fundraises. Notably, Archer ended the quarter with $1.03 billion in cash and equivalents. Moeller added that this figure does not include $47.5 million available through its at-the-market (ATM) program or up to $400 million in future support from Stellantis, which is expected to help expand production of the Midnight aircraft in Georgia. Moeller believes Archer's strong financial base gives it a clear edge over its rivals. The Department of Transportation has 180 days to choose five aircraft designs for the eIPP, and Moeller sees Archer as a top contender. In his view, Archer stands out as one of the two leading eVTOL developers in the U.S. Is ACHR Stock a Buy, Sell, or Hold?
