On Monday, Canaccord Genuity maintained a Buy rating on Eve Holding Inc. (NYSE: NYSE:EVEX) and increased the price target to $7.00 from the previous $6.75. The adjustment reflects the firm's confidence in the company's future, particularly noting the improved liquidity situation following favorable financing from BNDES and the support from its parent company, Embraer.
Eve Holding is currently on track with its plans for flight testing and certification through Brazil's National Civil Aviation Agency (ANAC), aiming for completion by 2027. This is anticipated to pave the way for a subsequent secondary type certificate from the Federal Aviation Administration (FAA).
The analyst highlighted the strategic positioning of the U.S./FAA and Brazil/ANAC as potential market leaders in the urban air mobility sector, providing streamlined regulatory processes and government-backed financing for electric vertical takeoff and landing (eVTOL) Original Equipment Manufacturers (OEMs).
Management at Eve Holding remains on schedule to test-fly the first prototype in the first half of 2025. The company's significant backlog, which includes over 2,900 preorders, is expected to be a key driver of cash flow. The company could potentially leverage this backlog to generate cash through pre-delivery payments (PDPs), offering customers production slots before serial production begins.
The new price target of $7 is based on a discounted cash flow (DCF) analysis extending through the year 2035, with the discount rate adjusted to 11.2%. Canaccord's analysis suggests that with the strategic moves and financial backing in place, Eve Holding is well-positioned to advance in the burgeoning urban air mobility market.
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