Al Root

Shares of several smaller aerospace and defense companies were taking it on the chin Monday. The common theme appears to be profit-taking after some truly epic moves.

Shares of electric vertical takeoff and landing, or eVTOL, aircraft manufacturers Joby Aviation and Archer Aviation were down 11.4% and 24.8%, respectively, in midday trading while the S&P 500 was up 0.2% and the Dow Jones Industrial Average was off 0.3%.

There doesn't seem to be a lot of news to pin declines on. There haven't been any Wall Street upgrades or downgrades, according to Bloomberg. Instead, both stocks seem to be giving back some recent gains.

Joby shares gained about 86% in November. Archer shares gained 204%. A positive analyst report in November helped catalyze those gains.

Big moves aren't isolated to those two companies. Shares of drone parts maker Unusual Machines were down 12% in midday trading after gaining 89% and 85% in the prior two trading sessions. News that Donald Trump Jr. was named an advisor to the company sent shares soaring.

Shares of space start-ups Rocket Lab USA and Intuitive Machines were both down about 10% on Monday. Rocket Lab stock gained 155% in November. Intuitive stock added 110%.

Solid earnings reports from both companies in November helped maintain momentum. Rocket Lab shares gained 28% after its third-quarter earnings report on Nov. 12. Intuitive shares fell 13% after its third-quarter earnings report on Nov. 14, but the stock was still up about 28% for the week.

There haven't been any upgrades or downgrades of Rocket Lab or Intuitive Machines to pin Monday's drop on either.

The same goes for Unusual Machines stock. Only one analyst covers the company, according to Bloomberg. ThinkEquity's Ashok Kumar rates shares Buy. His price target, set in June, is $4 a share. Shares were below that level about a week ago. The stock was at $16.16 in midday trading Monday.

The combined market capitalization of the five stocks mentioned is about $24 billion, and more than half of that is made up by Rocket Lab. They are relatively small companies that have seen their stocks go parabolic in recent trading.

It has been a wild Monday so far. For now, investors have to wait and see what happens next.

Write to Al Root at allen.root@dowjones.com

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December 02, 2024 13:42 ET (18:42 GMT)

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