Scotiabank downgraded AST SpaceMobile (ASTS) to Underperform from Sector Perform with an unchanged price target of $42.90. The stock in premarket trading is down 6%, or $4.18, to $68.72. The firm says the shares have formed a “valuation bubble” after doubling over the past month. The stock could undergo “painful corrections” as AST faces “significant competitive and operating risks,” the analyst tells investors in a research note. Scotiabank believes the more it takes AST to bring a service to market, the harder it will be to overcome Starlink’s improvements. The firm is concerned that some of the company’s customers could be weighing a move to Starlink.
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