Deutsche Bank is remaining bullish on aerial mobility company Archer Aviation in 2024. The firm listed Archer as a top pick in a Tuesday note, and reiterated a buy rating alongside a $12 per share price target. Deutsche’s forecast implies nearly 141% upside from Tuesday’s $4.96 close. “Archer remains our Top Pick again this year (after a nearly +230% move last year vs. NASDAQ +45%) for investors seeking exposure to aerial mobility with several positive catalysts in the pipeline while our stance on Joby continues to be cautious,” analyst Edison Yu said. Joby Aviation is developing a similar electric flying vehicle that will also operate as an air taxi vehicle. Yu added that Archer is at the behest of the Federal Aviation Administration in terms of regulation for electric flying vehicles, which underpins the 2025 forecast for commercial flights. However, the analyst highlighted Archer among eVTOL stocks due to the company’s progress on monetization, which he said should be helped by Archer’s first order delivery to the U.S. Air Force that is set to occur in the current quarter. Archer is also advancing faster than peers, with its first piloted test flight scheduled for the middle of 2024, the analyst added. The stock has been volatile since Deutsche first called it a top pick in November , which maintained the same $12 per share price target. During that time, shares hit an intraday around $7 per share before dipping back below $5. ACHR mountain 2023-11-01 Archer Aviation stock since November. The analyst cautioned that the sector is likely to remain volatile moving forward, as short interest in eVTOL companies including Archer remains high. Roughly 39 million shares of Archer stock are being sold short, according to data from FactSet, or more than 21% of the floating shares. Rival Joby has more than 73 million shares sold short, representing 19% of its float. “Beyond the high correlation with growth/risk-on assets, eVTOL stocks generally have a higher blend of retail involvement and concentration of large strategic investors,” Yu said. “Moreover, the short interest for Archer/Joby exited 2023 at elevated levels, creating potential for tactical volatility.”
