Joby (JOBY), Archer (ACHR) Retreat After JPMorgan Downgrades Shares

The shares of electric vertical take-off and landing (eVTOL) aircraft firms Joby (JOBY) and Archer Aviation (ACHR) are sinking 5% and 10%, respectively, today after JPMorgan downgraded both stocks.

According to the bank, the company’s stocks have gotten ahead of themselves.

A technician assembling an electric aircraft, highlighting the company’s manufacturing capabilities.

Assessing Archer and Joby

Archer and Joby are trading at levels that suggest that they have already received “type certification,” warned JPMorgan analyst Bill Peterson. According to the FAA, “type certification is the approval of the design of the aircraft and all component parts.”

Peterson cut his rating on Joby to Underweight from Neutral. As reasons for the downgrade, the analyst cited uncertainty about the effectiveness of eVTOL firms’ business models, certification risks, and the possibility that the demand for eVTOLs will come in below expectations.

On a positive note, Peterson believes that the eVTOL market will be larger than that of helicopters.

Turning to Archer, the analyst lowered his rating on the shares to Neutral from Overweight. Despite the downgrade, Peterson thinks that the company’s long-term outlook is positive, partly due to its favorable, realistic approaches to aircraft design and commercialization. Additionally, the analyst is upbeat on the company’s manufacturing partners.

The Recent Price Action of Archer and Joby

In the last month, Archer has climbed 32%, while its shares have soared 221% in the previous three months. Meanwhile, Joby has advanced 17.5% and 63% in those two time periods, respectively.

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Disclosure: None. This article is originally published at Insider Monkey.