AeroVironment's (AVAV) "strong" fiscal Q4 results and "conservative" fiscal 2027 guidance reinforce confidence in the defense technology company's growth outlook despite budget uncertainty, with solid bookings and higher investment expected to support organic growth, RBC Capital Markets said in a report emailed Tuesday.

AeroVironment reported fiscal Q4 revenue of $642 million, up 31% organically, with a 21.8% adjusted earnings before interest, taxes, depreciation and amortization margin, the report said.

The firm said the company's initial fiscal 2027 guidance appears deliberately conservative, creating the potential for a "beat and raise" performance over the course of the year, adding that strong fiscal Q4 results could improve investor sentiment, although a broader "re-rating" of the shares will depend on "execution" against fiscal 2027 targets.

Investors are likely to focus on AeroVironment's July 8 Investor Day for updates on its medium-term strategy, according to the report.

RBC maintained an outperform rating on AeroVironment but lowered its price target to $210 from $250.

Price: 158.24, Change: +19.24, Percent Change: +13.84