We are maintaining our Buy rating on shares of Vertical Aerospace and our $13.50 price target. Vertical still boasts the second-largest aircraft backlog in the industry and remains the lone European survivor among electric vertical takeoff and landing, or eVTOL, competitors, providing the company an enviable competitive moat, considering that American competitors won’t be able to export initial FAA powered lift-certified aircraft to the region for some time.
With the return of former (aircraft lessor) Avolon CEO Domhnal Slattery as chairman, we expect to see meaningful conversions of bankrupt competitors’ backlogs (particularly Lilium bizjet/luxury charter and airline shuttle customers) to Vertical’s backlog, which should ultimately result in an uptick in firm orders...
.It is apparent that the company will require additional capital that we have contemplated in our estimated discounted cash flow through 2035, which also includes revenue assumptions for aftermarket battery sales and service (Some 420 million pounds by 2035)..
