Mid-cap electric airplane maker Beta soars 16% as Jefferies upgrades to 'buy'

Shares of mid-cap electric aircraft maker Beta Technologies jumped almost 16% on Wednesday, February 11. The company disclosed that more than 5% of its shares are owned by technology giant Amazon. At the same time, investment bank Jefferies upgraded the stock to “buy,” which makes Wall Street unanimous in its bullish stance on Beta.

Beta Technologies shares rose 15.6% on the New York Stock Exchange on Wednesday to close at $19.39 per share. In premarket trading on Thursday, they added another 0.6%.

The rally followed a Schedule 13G SEC filing by the company that disclosed that  Amazon owns 5.3% of its shares, Barron’s reported. The tech giant invested in Beta back in 2021, along with GE Aerospace, one of the world’s largest aircraft engine makers.

Also on Wednesday, Jefferies upgraded its rating on the company’s shares from “hold” to “buy” and set a $30 target price per share, implying upside of almost 55% versus the last closing level.

Beta designs and manufactures electric airplanes, including electric vertical takeoff and landing (eVTOL) aircraft, propulsion systems, and charging infrastructure for the industry. Its near-term prospects are driven by three main factors, according to Jefferies analyst Sheila Kahyaoglu, as cited by Seeking Alpha.

Beta could begin cargo and medical transport operations on its aircraft as early as this year as part of a pilot program to integrate eVTOL aircraft into U.S. airspace, the analyst said. Contracts under the program are expected to be finalized in March. Jefferies estimates that the Beta CX300 electric airplane with conventional takeoff and landing has an advantage versus peers’ aircraft that rely exclusively on vertical takeoff. Certification of the CX300 is planned for 2027.

The company’s shares may also gain momentum with the expected certification of the Beta H500 engine in the first half of this year, Kahyaoglu added, as well as the start of a flight test program for an aircraft from Eve Air Mobility, with which Beta has a 10-year contract to supply engines worth up to $1 billion.

Kahyaoglu expects that for 2025, Beta’s revenue will have risen about 117% to $33 million, mainly thanks to sales of ground support equipment and initial deliveries under technology partnerships. Over the longer term, on Kahyaoglu's numbers, revenue will grow an average of 156% a year to reach $4.2 billion by 2030, with about 90% coming from aircraft sales.

The analyst noted that the company already has orders for 891 airplanes worth about $3.5 billion.

Among the risks, he cited delays in certification and supply chain constraints.

Beta is a newcomer to the public market. It held an IPO in November, selling almost 30 million shares at $34 per share, more than initially planned. Since then, however, the company’s market value has fallen nearly 43% to $4.6 billion.

At the same time, the eight Wall Street analysts covering Beta unanimously rate the stock a "buy," according to MarketWatch data. The average target price of $37.60 per share is almost 94% higher than current quotes.