AVAV: Increased focus on execution,expectations should reward investors into FY27; maint OP, $250 PT

研报英文原文证据摘录

AVAV: Increased focus on execution,expectations should reward investors into FY27; maint OP, $250 PT

A 275.1A

implied ~13% organic growth is doable, and management was confident in 2026 454.7A 472.5A 408.0A 560.0E

its typical seasonal 4Q strength. The recent Government shutdown pushed 2027 505.0E 535.0E 535.0E 595.0E

significant revenues into 4Q26. All values in USD unless otherwise noted.

Priced as of prior trading day's market close, EST (unless otherwise noted).

The initial FY27 guide represents the first opportunity for new CFO

Woodward to re-set expectations. Management firmly believes it can

return to a "beat and raise" cadence, and we expect the company to guide

to FY27 LDD to mid-teens revenue growth (consensus is for ~15% growth)

with flattish adj. EBITDA margins (we believe FY27 adj. EBITDA estimates

are too high). We believe, however, buy-side expectations are low, and

investors will appreciate a more conservative approach to guidance.

Beyond fiscal 4Q26 results, near-term catalysts include the LRR and

Enduring-High Energy Laser (E-HEL) contract opportunities. The company

is very confident in its E-HEL opportunity, with an initial $500M contract

potentially in the next 6 months (with an initial task order of ~$50M). The

FAA has recently cleared the Locust system for US use, and we believe the

company is shipping initial units to the Southern border. While timing of

contract awards has been a headwind for the defense tech sector (and

bookings visibility and the bridge to FY27 revenues are critical), we remain

confident in AVAV's position in the broader Group 1-3 drone market. While

we do not expect the full ~$75B requested in FY27 for drone dominance

to get approved, we expect significant growth off FY26 funding levels, and