Raymond James analyst Brian Gesuale downgraded AeroVironment to Market Perform from Outperform and removed the firm’s prior price target following the announcement that a protest has been filed against the company’s recent $990M IDIQ contract for Switchblade Loitering Munitions, which includes a $128M order. While protest outcomes typically favor incumbent awardees, this protest “virtually eliminates positive earnings revisions in FY25,” stokes competitive concerns, and halts backlog expansion momentum, the analyst tells investors. While a December decision would still leave three to four months of the fiscal year for AeroVironment to deliver against the IDIQ, assuming no appeal is filed, the firm is also reducing its FY25 estimates to reflect a disruption on orders, the analyst added.
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