UPDATE: Virgin Galactic Holdings Has ‘Established a Track Record’ of Launch Delays – BofA
2022.08.18 18:26
Virgin Galactic Holdings (SPCE) Has ‘Established a Track Record’ of Launch Delays – BofA
By Sam Boughedda
(Updated – August 18, 2022 11:05 AM EDT)
Virgin Galactic Holdings (NYSE:SPCE) shares have dipped in recent weeks after the company announced that progress on their enhancement program in Mojave is taking longer than they had planned.
In a note to investors Thursday, BofA analyst Ronald Epstein maintained an Underperform rating and cut the firm’s price target on the stock to $5 per share from $7, telling investors the company has “established a track record of pushing back launches.”
Virgin Galactic is shifting the expected commercial service launch from the first quarter of 2023 to the second quarter of 2023. For the second time this year, the company has postponed its planned suborbital flights.
“In August 2021, the company pushed back its first commercial flight to late 3Q22 from early 2022. We note that SPCE has grounded its fleet since October 2021 after starting its enhancement period early in order to address possibly weaker-than-expected materials on its spacecraft,” said Epstein.
“In July, SPCE executed a long-term lease for a new final assembly facility in Phoenix, AZ, for the Delta class spaceships. The company expects the facility to be fully operational by late 2023 and eventually capable of producing 6 Delta ships annually. However, we remain uncertain that there will be enough demand to justify these production level,” he added.
