AeroVironment Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drone designer AeroVironment (NAS: AVAV) were in flight today, gaining as much as 10% in intraday trading after a Wall Street upgrade.

So what:Goldman Sachs analyst Noah Poponak upgraded AeroVironment from neutral to buy and boosted his price target for the stock from $32 to $38. Poponak noted that while the overall defense sector may be challenged right now, the funding for unmanned aircraft is strong and growing. The analyst also suggested that AeroVironment could be a buyout target for a larger defense contractor, specifically calling out Boeing (NYS: BA) and Textron (NYS: TXT) as potential suitors.

Now what: For those who are already bullish on AeroVironment -- including my fellow Fools at Motley Fool Rule Breakers -- the bullish assessment is no doubt a welcome confirming view. For those on the sidelines who have been keeping an eye on the stock, this could be a good reason to tune back into the story to see whether there's good reason to be a buyer. However, it's important to remember that Poponak's take is just one analyst's view and by itself isn't much of a thesis for joining the excitement today and slapping the buy button.

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At the time thisarticle was published The Motley Fool owns shares of Textron. Motley Fool newsletter services have recommended buying shares of AeroVironment and The Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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