AeroVironment (NASDAQ: AVAV) faces headwinds in 2026, including the end of its SCAR contract and the resulting impact on market sentiment. However, even with analysts reducing targets and guidance below expectations, this defense company offers value to investors willing to buy at long-term lows and wait for traction to be regained. It is well-positioned with a battle-proven portfolio, a still-solid, if diminished, backlog, and a healthy balance sheet that enables reinvestment and improved shareholder value. The only question is the timing of a rebound, which could occur more quickly than the guidance update suggests.
Analysts are trimming targets following the fiscal Q3 2026 earnings update, but that is the worst that can be said of the data.
