ACHR - Eyes on the sky: Joby Aviation is a sell at Deutsche Bank Archer Aviation a buy

2023-03-07 08:23:35 ET

Joby Aviation ( NYSE: JOBY ) fell in early trading on Tuesday after Deutsche Bank downgraded the stock to a Sell rating from Hold.

The firm warned there are important risks being overlooked by the market and Joby's premium valuation is too lopsided in comparison to peer Archer Aviation ( NYSE: ACHR ), which is still slotted as a Buy recommendation and top pick at Deutsche Bank.

"Operationally, despite Joby being perceived as the leader in the industry, the developmental path of its eVTOL aircraft seems increasingly challenging to us as we think the aircraft is dealing with weight management issues. The current iteration being built is referred to as a 'Company conforming' version and will not garner any real testing credit with the FAA even when a pilot is onboard later this year."

In addition, Deutsche Bank said the regulatory/certification process has many moving parts for Joby Aviation ( JOBY ) at various stages getting submitted/reviewed concurrently, some of which the firm said it does not have good visibility on.

The recommendation to investors in the eVTOL/UAM space is to go long ACHR and sell JOBY.

Shares of JOBY were down 4.24% in the premarket session on Tuesday. ACHR showed a 1.25% decline.

Compare growth, profitability, and valuation metrics between JOBY and ACHR.

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