UPDATE: Bernstein Starts Virgin Galactic (SPCE) at Market Perform
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Bernstein analyst Douglas Harned initiates coverage on Virgin Galactic (NYSE: SPCE) with a Market Perform rating and a price target of $27.00.
The analyst comments "We assume a base scenario, where the first commercial flight is delayed to early 2022 (from Sep. 2021). This scenario gives $1.8 bn in revenues in 2030 and $878 mn in free cash flow. Valuation is complicated by long-term uncertainty. In our base case, ~75% of value is in 2030 terminal value, so discount rate and post-2030 growth assumptions are critical. After 2030, growth appears dependent on the base experience (e.g. number of Spaceports) and pricing. It is uncertain how attractive that will be post-2030, as we do not see a move beyond suborbital."
Shares of Virgin Galactic closed at $29.28 yesterday.
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