AVAV - Why AeroVironment Stock Lost 6% of Its Value on Friday
2024-03-08 18:07:52 ET
No stock, no matter how well its underlying company might be doing, can soar high forever. So it was with soaring drone stock AeroVironment (NASDAQ: AVAV) , whose price lost altitude at a more than 6% rate on Friday. A new analyst note was the main catalyst behind the drop, which was notably steeper than the 0.7% slip of the benchmark S&P 500 index.
Well before market open that day, Baird's Peter Arment downgraded his AeroVironment recommendation to neutral from his previous outperform (i.e., buy), at a price target of $161 per share.
While Arment likes the drone company's fundamentals, he's concerned about that share price surge. This, he pointed out in his note, was sparked by its fiscal third-quarter results released earlier this week. These trounced analyst expectations and showed hot growth over the year-ago period -- which shouldn't have come as that much of a surprise, given the surging demand for its combat drones.
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Why AeroVironment Stock Lost 6% of Its Value on Friday