Morgan Stanley Downgrades Gogo, Sees 18% Downside

  • Morgan Stanley analyst Landon Park downgraded Gogo Inc GOGO to Underweight from Equal Weight with a price target of $14, up from $13, indicating an 18.37% downside, as he assumed coverage of the stock. 
  • Gogo is benefiting from solid industry tailwinds as the dominant private jet in-flight connectivity provider with over 80% market share as the only holder of the licensed air-to-ground spectrum. He expects this to change over the next six months as competitor SmartSky launches service using unlicensed spectrum.
  • Gogo is yet to price in the competition risk as per Park. 
  • He also expects increased pressure from satellite companies over the next several years. 
  • Given his outlook for weaker net additions beginning in 2023, he added that Park projects revenue growth to decelerate from about 20% in 2021-22 to about 10% by 2023.
  • Price Action: GOGO shares traded lower by 6.65% at $16.01 in the premarket session on the last check Wednesday.
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