Virgin Galactic (SPCE) , the space travel company founded and part-owned by Richard Branson, received a buy rating and $50 price target from Truist analyst Michael Ciarmoli.
That target is the highest among the 10 analysts polled by FactSet. It is Ciarmoli’s initial rating on the stock.
"Ultimately we believe Virgin Galactic can capture at least 50% of the global space tourism total available market by 2030," he said in a commentary. “It’s uniquely positioned to capture share.”
But the Truist rating didn’t help Virgin’s stock price much. It fell 4.2% to $31.15 in premarket trading. Investors are concerned about valuation after the stock’s 87% surge in the six months through Tuesday. Already it has plunged 47% since Feb. 11.
"We see several near-term catalysts for the shares as the company demonstrates its capabilities through a series of testing activities planned during 2021,” Ciarmoli said.
“And we believe that once commercial operations commence (likely in our view in early 2022), demand will significantly exceed supply, providing the company with pricing leverage and enabling margin accretion as the company scales its operations,” the analyst added.
Earlier this month, regulatory filings showed that venture-capital investor Chamath Palihapitiya, chairman of Virgin, sold his personal stake for about $213 million. He still owns about a 6.5% stake, with a partner.
Virgin shares fell last month after the company said it was delaying its next test flight until May. The move came as the Las Cruces, N.M., company looks to fix an issue that was discovered earlier in February.