Virgin Galactic (SPCE) shares slumped Wednesday after Morgan Stanley analyst Kristine Liwag cut her rating on the company to underweight from equal weight, leaving her price target at $ 25 (U.S.).
A coming period of inactivity for the space company founded by Richard Branson moved her to act, according to a report by Liwag.
“After the expected flight of Unity 23 in September 2021, the company’s sole mothership, Eve, will be grounded for an eight-month enhancement period,” Liwag wrote in a report cited by Fox Business.
“During this heavy maintenance period, Virgin Galactic will not be able to conduct any space flights until summer of 2022,” the report said.
“We view it positively that the company is investing in increasing its long-term space flight capacity,” Liwag said. “However, these investments take time.”
Virgin on Wednesday traded at $ 27.09, down 14 per cent at last check. It has tanked 49 per cent in the last six months, with investors viewing it as overvalued.
Last week, the company said it was reopening sales of seats on its suborbital space flights, with prices starting at $ 450,000 a seat, up from $ 250,000 previously.
Virgin made the announcement as it reported a wider-than-expected loss on better-than-expected revenue.
The company posted a second-quarter loss of 39 cents a share on revenue of $ 571,000. Virgin Galactic had been expected to report a loss of 33 cents a share on sales of $ 300,000, based on a FactSet survey of 10 analysts.
For the year-earlier period, the company posted a loss of 30 cents a share. It reported no significant sales in the year-ago quarter.