Archer Aviation Inc. (ACHR) experienced a sharp decline on January 10, 2025, closing at $8.97, down 14.41% from the previous day's close of $10.48. The stock opened at $9.77 and fluctuated between a high of $10.05 and a low of $8.94, with trading volume slightly above average at 36,452,964 shares. The significant drop was primarily driven by a downgrade from J.P. Morgan, which shifted its rating from "overweight" to "neutral" and set a new price target of $9.00. The downgrade was based on concerns over Archer's valuation and the speculative nature of its recent stock performance, which J.P. Morgan suggested was not supported by fundamental business developments.
The downgrade was compounded by Archer's decision to double its share count, increasing supply and exerting additional downward pressure on the stock. Despite these challenges, some analysts, like Canaccord, remain optimistic about Archer's long-term potential, raising their price target to $14 due to shifts in energy investment trends. However, J.P. Morgan's cautious outlook reflects broader concerns in the eVTOL sector, including potential regulatory risks and the need for Archer to achieve critical certification milestones for its air taxi services.