DroneShield shares surged after Bell Potter upgraded its rating on the ASX-listed counter-drone developer. The broker hiked its share price target by nearly 14 per cent to $5, citing expectations that DroneShield would capitalise on increased defence spending. Investors responded positively, driving the stock up 9.5 per cent to $4.73 on Thursday. Bell Potter anticipates that DroneShield will secure material contracts from its $2.5 billion potential sales pipeline within the next three to six months, as defence budgets roll over to FY26. DroneShield specialises in developing counter-drone solutions. The company’s technology detects and neutralises unmanned aerial vehicles.
The bullish note marks a turnaround for DroneShield, which experienced a significant share price drop last year after management unexpectedly sold nearly $70 million worth of stock. Bell Potter highlighted several factors supporting its upgrade, including increased counter-drone spending by the European Union and new US laws permitting the use of drone-disabling technology at major events. The broker also noted a sector-wide rally driven by growing government interest in drones and counter-drone technology.
Despite the positive outlook, Bell Potter pointed out that ASX-listed drone stocks, including DroneShield, EOS Electro Optic, and ELS Elsight, are trading below their global peers. DroneShield is currently trading at a 34 per cent discount compared to its international counterparts. Bell Potter also emphasised DroneShield’s strengthening competitive advantage, attributed to its extensive battlefield experience and substantial research and development team.
According to Bell Potter’s data, DroneShield’s research and development job postings significantly outpace those of six key counter-drone competitors, further underscoring its commitment to innovation and growth in the sector. The renewed confidence from investors, coupled with a favourable industry outlook, suggests a promising future for the Australian company.
