This eVTOL stock just got downgraded at Goldman

Investing.com -- Goldman Sachs downgraded EHang Holdings to Neutral from Buy, citing fair valuation and a longer-than-expected timeline for commercial deployment of its EH216-S electric vertical takeoff and landing (eVTOL) aircraft, even as it remained positive on the long-term growth prospects for China's low-altitude economy.

The brokerage cut its 12-month price target to $7.30 from $16.90, saying previous assumptions for autonomous aerial vehicle (AAV) shipments were too optimistic given delays in launching commercial ticketed services and the early stage of overseas expansion and its VT-35 aircraft program.

Goldman said China's eVTOL industry continues to benefit from expanding commercial applications, including sightseeing, logistics and future air taxi services, supported by increasingly favorable government policies. It noted that the country's Civil Aviation Law and the 15th Five-Year Plan have strengthened the regulatory framework for the low-altitude economy, while provincial governments have introduced subsidies to support eVTOL operations and manufacturing.

Despite the downgrade, Goldman expects EHang's revenue to grow at a 77% compound annual rate between 2026 and 2028, driven by higher aircraft shipments and improving profitability. However, it lowered its 2027 and 2028 earnings forecasts to reflect slower commercialization, reduced revenue expectations and increased research and development spending.

The brokerage said faster commercialization, stronger demand for new technology and accelerated ecosystem development could serve as catalysts for a future re-rating of the stock.

You May Also Be Interested In

• IBM plunges 19% as memory capex squeeze derails Q2 earnings
• Why these two earnings reports could be "tone-setting" for the chip sector
• KeyBanc cuts Apple to Underweight, cites slowing hardware demand