Archer Aviation Inc

Archer Aviation Inc. (NYSE: ACHR) is an aerospace company. The Company is engaged in designing and developing electric vertical takeoff and landing (eVTOL) aircraft for use in urban air mobility (UAM) networks. The Company’s eVTOL aircraft are designed to be safe, sustainable, and quiet. Its production aircraft, Midnight, is designed around its proprietary 12-tilt-6 aircraft configuration. Midnight is designed to carry four passengers plus a pilot optimized for back-to-back short distance trips of around 20-miles, with minimal charging time between trips.

Recent Business and Financial Updates

• Archer's Agreement with Stellantis: Archer Aviation announced reaching an agreement in principle on key terms for a contract manufacturing relationship with Stellantis. Stellantis is expected to contribute up to USD 400 million towards scaling Archer’s Midnight aircraft production to 650 units annually by covering labor costs and specific capital expenditures at Archer's Georgia facility until 2030. This funding is incremental to Stellantis' recent USD 55 million equity investment in Archer, adding to its strategic support in helping Archer achieve its manufacturing targets.
• Equity Capital Secured Post-Q2: Since the end of the second quarter of 2024, Archer secured an additional USD 230 million in equity capital from strategic and institutional investors, including Stellantis and United. This capital infusion, which includes USD 55 million from Stellantis and a further USD 175 million from institutional investors, will be utilized for working capital and general corporate purposes, further strengthening Archer's financial position as it progresses toward commercialization.
• Los Angeles Air Taxi Network Unveiled: Archer revealed plans for an air taxi network in Los Angeles, targeting key locations such as Los Angeles International Airport, Hollywood Burbank, and Long Beach. Additionally, Archer is collaborating with the Los Angeles Rams and Hollywood Park to explore exclusive vertiports near SoFi Stadium. This planned network aligns with Archer’s long-term strategy, with the goal of launching air taxi services in Los Angeles by 2026, coinciding with major sporting events in the city.
• Midnight Aircraft Delivery to the U.S. Air Force: In a significant milestone, Archer delivered its first Midnight aircraft to the U.S. Air Force under the AFWERX Agility Prime contract, which is valued at up to USD 142 million. The delivery, followed by a series of test flights, marks an important step in Archer’s relationship with the Department of Defense, as the Midnight aircraft is tested for various military applications, including medical evacuations and intelligence missions.
• Archer's Expanding Order Book: Archer announced that Future Flight Global, a leader in business aviation, intends to purchase up to 116 Midnight aircraft, valued at approximately USD 580 million. This agreement brings Archer's indicative order book to nearly USD 6 billion, reflecting the growing market demand for electric vertical take-off and landing (eVTOL) aircraft and further solidifying Archer’s position as a key player in the future of urban air mobility.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 38.52, currently near the oversold zone, taking support form 30 levels, with expectations of a consolidation or an upward momentum from the current support levels of USD 3- USD 3.30. Additionally, the stock's current positioning is below both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Archer Aviation Inc. (NYSE: ACHR) at the closing market price of USD 3.28 as of September 09, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is September 09, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.