Virgin Galactic (SPCE) shares have been out of this world, more than tripling over the past three months, but analysts at Morgan Stanley believe investors should fire the retrorockets on the stock as it has risen too high too quickly.
Analyst Adam Jonas said he remains “very constructive” on Virgin Galactic’s story, but investors appear “to be driven by forces beyond fundamental factors.”
Jonas maintained his overweight rating and $22 price target with a $60 bull case. Virgin Galactic shares were up 29% to $36.90 on Tuesday and hit another all-time high as they look to extend six session winning streak.
Over the past three months, the stock has risen more than 200%.
The stock shot up Tuesday after Park West Asset Management disclosed late Friday that it was the beneficial owner of 4.25 million shares of the company, representing a 2.1% stake. Park West is now Virgin Galactic’s seventh-largest shareholder, up from its previous status as its 13th-largest shareholder.
Last week, the company said that its VSS Unity spaceship was successfully relocated to Spaceport America in New Mexico, which is the next step in allowing the company to commence the final stages of its flight test program.
The company said that it attached the VSS Unity to a carrier aircraft which flew the spacecraft to New Mexico. The flight allowed the company to evaluate the spacecraft at high altitude and cold temperatures for more than three hours.
Those type of evaluations are difficult to replicate on the ground, making the trip vital to the company’s testing.