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Virgin Galactic received FAA authority to carry paying passengers, which boosted the stock significantly.
Virgin Galactic (c) Virgin Galactic (c) Virgin Galactic (c) Virgin Galactic
Virgin Galactic is a company that specializes in space travel
From Buy to Sell, the stock received a remarkable double downgrading.
Bank of America is a financial institution based in the United States.
following a startlingly rapid price increase It serves as a warning that, while things are looking brighter for the space tourism company, there are still risks to be aware of. Analysts often upgrade or downgrade stocks one notch at a time, moving from Buy to Hold and Hold to Sell, respectively. After the price just surged beyond his $41 goal, BofA’s Ronald Epstein swung from Buy to Sell.
The stock fell down 6.7 percent to $43.89 on Wednesday morning, despite a 50 percent rally in the previous month. The
S&P 50
On Wednesday morning, 0 was slightly lower, whereas the
The Dow Jones Industrial Average is a stock market index that measures how well
was a little bit higher. Blinking investors may have missed the gain. In May, Virgin Galactic’s stock fell below $15 due to flight-testing delays. The stock rose beyond $55 less than a week ago, thanks to management’s efforts to get testing back on track, which resulted in the granting of a Federal Aviation Administration license to carry paying customers. The FAA’s decision is significant, but analysts expected it. In his downgrade assessment, Epstein stated, “We continue to regard Virgin Galactic as a benefactor of the new commercial space race.” “However, we believe that this premium has already been factored into the stock and that as additional commercial space companies go public, this premium will diminish.” Competition is on its way. Blue Origin, for example, is ready to launch creator Jeff Bezos, his brother, and a commercial passenger into space for a $28 million fee. Epstein believes that investing in space is dangerous, and that investors should budget for delays and other potential bad news. For example, Galactic stock took a beating after the company revealed in late February that it was having trouble managing electromagnetic interference on test flights. The time it took to fix that issue pushed back the start of commercial operations. After the stock’s meteoric increase, Epstein isn’t the only analyst who has downgraded it. This week, Alembic Global Advisors analyst Peter Skibitski downgraded his rating to Hold. Three out of nine analysts tracking Galactic now rate the stock as Buy, up from six out of ten at the start of June. Stocks in the S&P 500 have an average Buy-rating ratio of around 55%. The average analyst price forecast is around $32 per share, up nearly $2 since the company received approval to carry paying clients. Al Root can be reached at allen.root@dowjones.com./n
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