Morgan Stanley Sees High Execution Risk, ‘Potential For Further Slips’ After Virgin Atlantic’s Commercial Spaceflight Gets Delayed

• Morgan Stanley lowered its price target on Virgin Galactic to $2 from $2.05 and kept an ‘Underweight’ rating.
• Virgin Galactic CEO Michael Colglazier said the revised schedule gives the company more time to complete avionics and other systems installations.
• Second-quarter loss of $0.50 per share was narrower than Wall Street’s estimates of a $0.65 per share loss.

Virgin Galactic (SPCE) was on investors’ radar on Thursday, after Morgan Stanley warned of ‘elevated execution risks’ after the aerospace firm’s commercial spaceflight suffered a setback.

At the time of writing, SPCE shares were down 8% and were on track to record a first decline in six sessions.

Morgan Stanley Maintains Underweight Rating

Morgan Stanley lowered its price target on Virgin Galactic to $2 from $2.05 and maintained an ‘Underweight’ rating, according to The Fly. The firm sees high execution risk and warned that the testing process could potentially result in further slips.

The stock has a consensus 12-month price target of $3.52, according to Koyfin data. Four out of the seven analysts covering the stock have a ‘Hold’ rating, two have a ‘Buy’ rating, while one has a ‘Sell’ rating.

Spaceship To Enter Commercial Service In February 2027

On Wednesday, Virgin Galactic said its spaceship is expected to enter commercial service in February 2027, compared to the previous target of the fourth quarter of 2026.

CEO Michael Colglazier said the revised schedule gives the company more time to complete avionics and other systems installations.

Flight testing of the first Delta-class spaceship is expected to begin in October, while a second spacecraft is scheduled to join the fleet in March 2027. Virgin Galactic expects the expanded fleet to help it achieve positive quarterly cash flow sometime in 2027.

Customer Interest Remains Strong

Despite the delay, Colglazier highlighted strong customer interest. The company’s batch of spaceflight expeditions priced at $750,000 per seat was “oversubscribed and booked out ahead of schedule,” he said.

“We expect to release a new tranche of spaceflight expeditions at higher price points this fall,” Colglazier added.

Virgin Galactic also reported second-quarter results, with loss coming in at $0.50 per share, compared to Wall Street’s estimates of a $0.65 per share loss, according to Fiscal.ai data.

The company expects negative free cash flow of $95 million to $100 million in the third quarter, improving to a negative $80 million to $90 million in the fourth quarter.

Retail’s Take On SPCE Earnings

Meanwhile, retail sentiment for SPCE on Stocktwits shifted to ‘extremely bullish’ from ‘neutral’ over the past 24 hours, amid a 200% increase in message volumes.

One user said, “The delay is not good, but the rest is huge potential.”

The stock is down around 5% so far this year.

Also read: Cowboy Space Founder Baiju Bhatt Talks About Building AI Data Centers In Space – ‘We Want To Forge Our Own Path’

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