On Thursday, Canaccord Genuity (TSX:CF) increased the price target for Archer Aviation Inc. (NYSE: NYSE:ACHR) to $11.00 from $8.50, maintaining a Buy rating on the stock. The adjustment follows Archer Aviation's announcement of an exclusive partnership with defense contractor Anduril Industries. This collaboration is aimed at developing an unmanned hybrid vertical takeoff and landing (VTOL) aircraft for defense purposes.
The newly formed business segment, Archer Defense, will concentrate on creating the hybrid VTOL aircraft, with aspirations to secure a significant Department of Defense (DoD) program. Anduril Industries, co-founded by Palmer Luckey, is known for its advanced technology capabilities in AI, computer vision, sensor fusion, optics, and drone technology. The partnership leverages Anduril's tech expertise and Archer's experience in producing full-scale VTOL aircraft, battery modules, and electrified propulsion systems.
The establishment of Archer Defense is an expansion of the company's existing relationship with the DoD. Previously, Archer Aviation had been involved with the DoD through a $142 million Agility Prime R&D contract. The company has recently delivered a Midnight aircraft to the United States Air Force (USAF) for military airworthiness evaluations, marking a step forward in their collaboration.
The new alliance with Anduril is set to enhance Archer's capabilities in the defense sector by combining its rapid manufacturing processes with Anduril's technological innovations. The goal is to introduce a sophisticated military VTOL drone to the market, which could have significant implications for the company's growth and presence in defense applications.
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