Shares of Virgin Galactic jumped another 14% in Tuesday’s pre-market trading after closing 21% higher on Feb. 1, as the aerospace company provided an update about its flight test program.
The aerospace and space travel company announced the date as Feb. 13 for the opening of its flight window for the rocket-powered test flight of SpaceShipTwo Unity.
Virgin Galactic (SPCE) said that its test flight will be manned by two pilots and will carry research payloads as part of the NASA Flight Opportunities program. The company said that one of the main objectives of the flight was to test the repair work that had been completed last month. In December, Virgin Galactic had to abort its test flight to space as the rocket motor failed to fire after an incomplete ignition sequence.
Since the incident, the company has carried out the corrective work for the test flight and has done extensive testing on the ground, it said. The next step in the process involved assessing and verifying the remedial work during a rocket-powered test flight. (See Virgin Galactic stock analysis on TipRanks)
Virgin Galactic CEO Michael Colglazier said, “We are pleased to be able to get back to the skies and continue our flight test program. I would like to thank our team for their continued hard work and diligence in working towards this important milestone for Virgin Galactic.’’
Following the announcement, Morgan Stanley analyst Adam Jonas downgraded the stock from Buy to Hold but raised the price target from $24 to $30.
Jonas considered the test flight announcement as good news, but he cautioned that, “investors must balance the excitement around the upcoming test flight milestones…while factoring in a slower ramp to commercial operations this year due to Covid-19 and testing delays.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 analysts recommending a Buy and 2 analysts suggesting a Hold. The average analyst price target of $32 implies 41% downside potential to current levels.