Shares of electric air taxi company Archer Aviation rose more than 8% on Friday, December 6, and continued to climb in premarket trading on Monday, December 9. The company announced an agreement that aims to make Archer the first manufacturer of electric vertical-take-off-and-landing (eVTOL) aircraft in the Middle East and North Africa and the first to launch commercial flying taxi operations in the UAE. Over the last month, Archer’s stock has surged more than 150%.
Details
Archer Aviation stock rose over 8% on the New York Stock Exchange on Friday to $8.28 per share. The gains have been extended today, with shares up over 1% before the opening bell as of this writing. For the year to date, Archer shares have now gained nearly 35%.
On Friday, Archer announced a multiparty collaboration agreement with “key UAE and Abu Dhabi entities.” The goal, according to the company’s announcement, is to make Archer the first manufacturer of eVTOL aircraft in the Middle East and North Africa (MENA) and the first operator of flying taxis in the Emirates.
The agreement was signed by nine parties (including Archer). It outlines the roles and responsibilities of each in “laying the foundation” for commercial air taxi operations. For example, Etihad Aviation Training will train pilots and other aviation professionals, Global Air Navigation Services will integrate urban air mobility (UAM) operation into the Abu Dhabi airspace, and the Abu Dhabi Investment Office will coordinate project development.
What Archer does
Archer Aviation, with a market capitalization of $3.52 billion as of the close of trading on Friday, develops electric air taxis. Known as Midnight, these battery-powered aircraft are capable of vertical takeoff and landing, similar to helicopters. It is hoped that Archer’s electric air taxis “will carry passengers to and from many airports and future vertiports in the region in the near future,” according to Paolo La Cava, CEO of Etihad Aviation Training, as quoted in Archer’s announcement. Still, Archer has disclosed neither how many such facilities it plans to build nor how many air taxis it will manufacture in the region.
Archer aims to launch commercial air taxi operations in Abu Dhabi by the end of 2025, Nikhil Goel, the company’s chief commercial officer, told The National, a UAE newspaper. Yet the company’s ambitions go beyond the Middle East. Archer is currently working on getting approvals to carry passengers in major cities worldwide. In the U.S., air taxi services could become operational as early as 2028, according to the Federal Aviation Administration (FAA), as reported by Barron’s.
Archer already has preorders for Midnight aircraft totaling over $6 billion. Its partners include airlines such as Southwest and United, as well as the automotive giant Stellantis, which manufactures Chryslers, Jeeps, and Fiats. Stellantis has pledged up to $400 million to help Archer to scale production of its air taxis and was among the institutional investors that recently contributed $230 million to the company.
Analyst insights
According to MarketWatch, nine analysts currently cover Archer Aviation, with eight rating the stock a “buy” (“buy” and “overweight” ratings) and one advising to hold it. Their average target price is $9.61 per share, representing 16% upside from the last closing price.
Archer shares have soared more than 150% over the last month, according to the Motley Fool. The stock got a big boost after Needham, an investment bank and asset manager, initiated coverage of Archer with a “buy” recommendation. Since then, the stock gave up some of those gains in early December following the sudden resignation of Stellantis CEO Carlos Tavares. Barron’s noted that investors were likely concerned about the future of the Stellantis-Archer partnership.
