Bank of America cuts Virgin Galactic's target price by 39%
Bank of America cuts Virgin Galactic's target price by 39%
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Virgin Galactic target price
Bank of America Corp (NYSE:BAC) has cut its target price on Virgin Galactic (NYSE:SPCE) shares by 39%, from $41 to $25, Market Insider reports.
Analysts at the bank noted delays in the company's commercial spaceflight schedule and a lack of catalysts for the securities' growth in the short term.
Virgin Galactic shares fell about 1% on Friday to $23.99, down 4.8% for the week.
The BofA said longer maintenance on the Virgin Eve Mothership would delay the company's first commercial passenger flight until the end of the third quarter of 2022, while the flight was scheduled for early 2022.
It is worth noting that this will result in lower short-term earnings estimates, analysts say. In the longer term, they also expect Virgin's plan for orbiting flights with tourists on board to materialise only in 2035, not 2028 as they previously thought.
With the delay, Virgin Galactic shares lack short-term catalysts for growth, notes BofA. Shares could also face downward pressure as the next lock-up period expires in October.
Also, it is worth adding that Virgin Galactic shares are up 1.9% since the start of the year.
Virgin Galactic is a company that plans to launch tourist suborbital flights and is also involved in launching artificial satellites.
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