Virgin Galactic stock stuck on Morgan Stanley call

Virgin Galactic shares are coming back to earth after Morgan Stanley became more cautious of Richard Branson’s space company.

In a note to clients, Morgan Stanley analyst Kristine Liwag said she and her team expect Virgin Galactic shares to return to a price target of $ 25 as the company drops from ‘a “catalyst rich period” to an extended period without theft. The stock’s move would imply a 20% drop from recent levels of $ 31.33 per share.

“Following Unity 23’s scheduled flight in September 2021, the company’s sole mother ship, Eve, will be grounded for an 8-month upgrade period. During this period of heavy maintenance, Virgin Galactic will not be able to perform no space flights until the summer of 2022, “Liwag wrote. “We positively view the company investing in increasing its long-term spaceflight capacity; however, these investments take time.”

Additionally, Liwag expects Virgin Galactic to generate around $ 1.3 billion in sales and around $ 743 million in profit before interest, taxes, depreciation and amortization by 2030.

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Wednesday’s drop comes a day after stocks dived into the news Virgin Galactic is reportedly raising its space flight ticket price from $ 250,000 to $ 450,000 following its successful Unity 22 mission in July. Ticket sales will prioritize the company’s “space travelers” and “early hand-lifters” first before opening up to the general public.

Richard Branson moves into the cabin. (Galactic Virgo)

“We expect that many consumers will want to travel with friends or family, and we will customize the experience to meet their individual preferences,” Virgin Galactic CEO Michael Colglazier told investors on Thursday. the call for the company’s second quarter results.

Virgin’s product line for private astronaut flights will include single seat, multi-seat, couples, family & friends package, and full flight buyback.

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Colglazier noted that the company’s next spaceflight, Unity 23, will focus on microgravity research and professional astronaut training experience. Unity 23 will transport members of the Italian Air Force. Virgin plans to charge $ 600,000 per seat for future microgravity research and professional astronaut training flights.

VSS Unity and VMS Eve will then undergo their improvement periods. The improvements, subject to testing and verification, could reduce Unity’s flight turnaround time to four to five weeks, from seven to eight weeks currently, and potentially allow VMS Eve to perform 100 flights between flights. major maintenance inspections, compared to the current interval. of 10 flights, according to Colglazier.

Following the improvement periods, Virgin will operate their Unity 24 full crew flight, which will validate the changes and serve as the final confirmation of the mid-size commercial cabin. Unity 25, which is scheduled for the end of the third quarter of 2022, will then mark the start of commercial service with private astronauts.

In addition to VSS Unity and VMS Eve, Virgin is working on a fleet of “Delta Class” vehicles, which will be capable of performing one-week rotations, as well as a next-generation mothership.