Volatus Aerospace shares jump after first Canadian Defence Drone Initiative order

Volatus Aerospace shares jump after first Canadian Defence Drone Initiative order

Volatus Aerospace Inc. (FLT:TSX) rose this week after winning its first order under the Canadian Defence Drone Initiative. The company’s shares have traded between 89 cents and 46 cents this year.

First order: 100 systems up to $500,000

Volatus secured an initial contract for 100 systems worth up to $500,000. The Canadian Armed Forces (CAF) also holds options for 4,900 more systems, which would total up to $24.5 million.

Analyst view: testing before a larger 2027 contract

TD Cowen’s three best ideas for Canada were also covered in the same market roundup, but the Volatus catalyst came from a Stifel Canada analyst’s assessment. Stifel Canada analyst Greg MacDonald maintained a 12-month price target of $1, while shares closed Friday at $0.63, implying potential upside of about 59 per cent.

MacDonald said the CAF is using the initial order to assess how operational Volatus’s systems are before committing to a larger contract in 2027. He said the government’s priority is fast, mass drone production and that Volatus should clear both the technology and manufacturing capability “gate.”

Price targets and trading range

Volatus has a 12-month price target of 95 cents based on calls of five analysts, according to Bloomberg. This year, shares have climbed and fallen, reaching as high as 89 cents and as low as 46 cents.

TD Cowen “best ideas” for Canada: NWC, Whitecap, Chartwell

TD Cowen analysts published three “best” stock ideas for Canada covering defensive, growth and undervalued names.

  • The North West Co. Inc. (NWC:TSX): Cheryl Zhang said the base business is undervalued and pointed to remote-location benefits, its food business, and potential infrastructure investment. Shares closed Friday at $51.67.
  • Whitecap Resources Inc. (WCP:TSX): Aaron Bilkoski raised his price target to $21 from $18, citing a record of earnings beats and raises. Shares closed Friday at $18.50.
  • Chartwell Retirement Residences (CSH/U:TSX): Jonathan Kelcher said the stock’s pullback of about 13 per cent during the summer reflects investor concern over a net operating income metric for the same properties. He set a $27 price target. Shares closed Friday at $20.13.

Why it matters

The Volatus order provides an early scale contract from the CAF, with options that could expand materially. For investors, the focus now shifts to whether the company’s systems and manufacturing capacity meet the threshold for a larger commitment in 2027.