Bernstein is losing faith Virgin Galatic as the company pushes off commercial space flights and continues burning through cash. Analyst Douglas Harned downgraded the stock to underperform from market perform and trimmed his price target to $4 from $7 a share. He cited declining confidence in the business after yet another disappointing earnings report from the space tourism company in August, where it pushed its commercial service launch further into 2023. “Although we saw substantial risk for Virgin Galactic when we launched coverage, we believe the situation for the company has deteriorated over time,” Harned wrote. “Flight schedules have been delayed, much more work has been required on the mothership and early spaceships, more cash has been required, interest rates have risen, and the decline in the share price has lowered the value of share-based compensation.” Shares of the company have fallen more than 89% from their February 2021 peak and more than 53% this year. The stock could tumble another 36% from Thursday’s close based on the bank’s price target — especially if delays persist. At the same time, Harned expects challenges ahead for the company’s long-term timeline and few upside catalysts needed to drive necessary growth into the 2030s. “We now have less confidence in the success of this business,” Harned said. “We previously saw potential for high operating cash generation, but with substantial risk.” — CNBC’s Michael Bloom contributed reporting
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