Aerovironment (AVAV) Back Below Key Support Following Downgrade

Yesterday, Aerovironment (AVAV) fell back below key support of the 50 and 200 day moving averages after Janney Montgomery downgraded the stock from Buy to Neutral.

Hat tip to for the following analyst comment:

“Aerovironment (AVAV) reported the first loss in its history as a public company in its fiscal 2010 first quarter (ended August 1, 2009), as the result of orders being pushed back by customers waiting for the Company’s eagerly anticipated DDL product. While we are believers in the long-term story for this stock, we see very limited upside at this point and are stepping aside to see what happens with the Company’s rollout of its DDL product. We have lowered our FY2010 (-1.9%) and FY2011 (-2.5%) estimates, while raising estimates for the back half of FY2010 to account for the backlog in DDL shipments and retrofits. We have also lowered our earnings multiple from 18x to 16x CY2010 as the result of worse-than-expected lumpiness in quarterly earnings. Our new fair value of $29 (down from $33) is based on 16x our CY2010 EPS estimate of $1.80 (previously $1.83).”

While a big portion of AVAV’s biz is unmanned aircraft, the company also produces rooftop wind turbines and could be a big player in charging stations for electric cars.

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