Bank downgrades Virgin Galactic
November 23, 2023
Space tourism business Virgin Galactic, already under financial pressure, has been downgraded by analysts at investment bank Morgan Stanley.
The Morgan Stanley report (specifically on Virgin Galactic Holdings) has been rated “Underweight” by the bank with a Price Target of just $1.75. The report prompted a share sell-off and a fall on November 22nd of 7 per cent (to $1.99) and an overall fall of 61 per cent over the past 12 months.
Virgin Galactic is slowing down its planned sight-seeing sub-orbital launch missions as it transitions from the current “Unity” space plane which last flew on November 2nd and would now fly every quarter year starting with its next flight (Galactic 06) in January. Galaxy flight 07 would follow early in the company’s Q2.
The company will then move to its ‘Delta’ programme and a slightly larger passenger compliment.
“Unity’s flight objectives are to demonstrate our system, showcase our astronaut experience and provide learnings for our Delta programme,” stated Michael Colglazier, Virgin Galactic’s CEO on the company’s Q3 results call on November 8th. “The total costs to support Unity’s flights surpass the relatively modest monthly revenues. The big move we’re making here is pivoting the resources that have been put into the Unity flights and redirecting them over to get the Delta ships done with the cash we have on hand.”
The company has also laid off staff – reportedly 185 jobs.
Virgin Galactic is also raising its price per seat for would-be passengers to “up to $1 million”.