JPMorgan is turning more cautious on shares of Joby Aviation in the wake of its recent stock outperformance. Analyst Bill Peterson downgraded the electric aircraft stock to underweight from neutral. He also called the recent market reaction that sent shares up more than 60% at the end of June “largely overblown” and a likely result of short covering versus improving fundamentals. For the year, Joby shares are up 200%. JOBY YTD mountain Shares have tripled since the start of the year “To be clear, we like Joby’s management team and solid execution on its certification timeline and low-volume manufacturing plans at this stage, and we appreciate the recent disclosure around range, payload, and battery technology,” he wrote. “We continue to expect that the ramp for eVTOL commercialization will take longer with a much more gradual ramp up than is currently embedded in bullish expectations.” Along with the downgrade, Peterson lifted his price target to $6 from $5 a share, reflecting 40% downside from Monday’s close. Shares sank dropped nearly 7% in premarket trading. Despite these near-term concerns, Peterson expects both Joby and peer Archer Aviation to make progress toward hitting certification by 2025 but recommends searching for a better entry point on shares. He views Blade Air Mobility as a potentially “safer way” to currently play the advanced air mobility trend. “While we continue to like the longer-term outlook on the sector, we think near-term focused investors could see relatively better performance in OW-rated BLDE which is already proving out AAM use cases in a few regions with helicopters, with an eventual transition to eVTOL,” he said. — CNBC’s Michael Bloom contributed reporting.
