Virgin Galactic Enters 'Catalyst-Light' Period, Analyst Slashes 2024 Forecasts

Shares of Virgin Galactic Holdings Inc SPCE tanked in premarket trading on Wednesday, along with some other top stocks.

The company has decided to pause revenue-generating space flights with the aim of conserving cash and as it “redoubles efforts on Delta,” according to Morgan Stanley.

The Virgin Galactic Analyst: Kristine Liwag downgraded the rating for Virgin Galactic from Equal-Weight to Underweight, while slashing the price target from $4.00 to $1.75.

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The Virgin Galactic Thesis: The New Mexico-based company has “proven out” the concept of space tourism, with five consecutively successful missions since late June 2023, Liwag said in the downgrade note.

“We see SPCE’s latest decision to now scale back near-term flight activity and prioritize development / production of its Delta-class fleet as prudent, and view capital preservation efforts supporting the longevity of the business,” the analyst wrote.

The next couple of years could be a “catalyst-light period” with only around two flights planned for the first half of 2024, “after which it will halt revenue-generating flight activity until the planned arrival of the first Delta-class ships in ~2026," Liwag added.

SPCE Price Action: Shares of Virgin Galactic had declined by 5.16% to $2.02 in premarket trading on Wednesday.