AMAERO LTD [ASX:3DA]
Aerospace & Defence
Transforming Defence, Aerospace, and Industry Through NextGeneration Manufacturing Technologies
We initiate coverage on Amaero Ltd (ASX: 3DA) with a Target Share Price of $0.978, offering a substantial 120% upside from the current $0.445. Amaero is uniquely positioned as a US based leader in large-format, high-performance metal additive manufacturing, capitalizing on surging global and U.S. defence and aerospace spending and the critical drive for industrial onshoring. The company delivers unmatched performance through its best-inclass refractory powders, essential for mission-critical components, and advanced manufacturing techniques. With significant U.S.-based facilities and robust US government support, Amaero provides resilient domestic supply chains. Deep industry partnerships and experienced leadership validate Amaero’s technological edge, offering a clear trajectory for accelerated growth and substantial shareholder value in this booming market.
Strategic Positioning and High-Margin Products
Amaero is strategically positioned to capitalize on powerful macro-trends, including U.S. reindustrialization, strengthening domestic supply chains, and increased defence spending. As a U.S.-based producer, Amaero directly addresses national priorities for supply chain resilience. The company excels in a dual-product model, delivering both high-value alloy powders and large, near-net-shape components via Powder Metallurgy Hot Isostatic Pressing (PM-HIP). This approach drives diversification and high-margin growth within the defence, space, aviation, medical and oil & gas industries. Amaero has solidified its position as a critical domestic supplier by commissioning the largest capacity and lowest cost U.S. domestic production of C103, refractory, and titanium alloy spherical powders, ensuring essential feedstock traceability
First Mover Advantage and Government Validation
Amaero has significantly advanced its strategic position by securing a US$22.8 million nondilutive loan commitment from the U.S. Export-Import Bank through the "Make More in America" program. This funding solidifies Amaero's role as a critical domestic supplier, aligning directly with U.S. national priorities for supply chain resilience. Amaero significantly enhanced its capabilities by successfully commissioning its second atomizer in June 2025, ahead of schedule. This strategic expansion effectively doubled the company's production capacity, strengthening Amaero’s first-mover advantage in the U.S. domestic market for high-value powders and accelerating its path toward profitability.
Scalability, Premium Technology, and Strategic Partnerships
Amaero's expanded atomizer capacity offers significant operating leverage. The company maintains a strong technological advantage through its Advanced Gas Atomization (EIGA Premium) systems, the most advanced EIGA technology in the U.S., and its PM-HIP expertise. This technological edge, combined with an experienced leadership team, has secured a strategic alliance with ADDMAN, Castheon, and KAM, making Amaero their preferred C103, refractory, and titanium alloy AM powder supplier. This partnership secures demand, establishing Amaero as a trusted advanced manufacturer.
3DA Valuation
We value 3DA at $0.842 in our base case (89.2% upside) and $1.114 in our bull case (150.3% upside), relative to the current share price of $0.445. Using the midpoint of these scenarios, our target price of $0.978 implies a potential upside of 120%. Despite conservative C103 ramp-up assumptions, we maintain high conviction in Amaero’s strategic position and strong growth potential within the advanced materials sector, specifically aerospace and defence.