Virgin Galactic (SPCE) - Get Virgin Galactic Report shares fell in premarket trading Wednesday after Bank of America double downgraded the stock to underperform from buy, leaving its price target at $41.
The bank’s analysts acted on valuation. They still believe in the company’s success, but the current premium in its stock price “will dwindle as more commercial space companies go public,” the Bank of America analysts wrote.
Virgin Galactic, founded and partly owned by billionaire Richard Branson, skyrocketed 39% last Friday after the Federal Aviation Administration gave it approval for space flights.
But it has dropped 20% since then, including a 5.27% slide Wednesday to $44.54. The stock soared 98% in the six months through Tuesday.
Bank of America issued the first sell-equivalent rating on Wall Street on Virgin Galactic shares, according to Bloomberg.
As for the FAA approval, it follows a May 22 test flight from the group's launch base in Spaceport America, New Mexico, when its VMS Eve and VSS Unity reached an altitude of 55.5 miles and a top speed of Mach 3.
The group also plans to have its first crewed test flight later this summer, likely in the weeks following the maiden flight of Amazon founder Jeff Bezos' Blue Origin rocket company.
Meanwhile, Brent Kenwell wrote on TheStreet Friday that “Virgin Galactic now has the catalysts that bulls have been waiting for and all-time highs aren’t that far away.
“I love the chart for Virgin Galactic stock. It’s such a good trading vehicle and really respects the technical,” he said.