By Dhirendra Tripathi
Investing.com – Virgin Galactic (NYSE:SPCE) fell 5% Wednesday after BofA Securities delivered a double downgrade for the space travel company’s stock.
BofA analyst Ronald Epstein downgraded Virgin Galactic to underperform from buy because of the recent surge in the price.
The stock more than doubled in the first 28 days of this month including 39% purely on the news of the company securing Federal Aviation Administration’s approval to carry humans into space.
The analyst cited the FAA approval and noted the company remains a beneficiary of the commercial space race.
But given the surge in the share price, Epstein believes the premium is already priced in amid rising competition.
"Furthermore, the development of space technology carries significant risk and the market tends to respond more volatilely to development-related new," the analyst note said.
He also pointed out that Virgin Galactic has yet to tell when it would begin commercial services.
A fully-crewed test flight is planned for this summer by the Richard Branson-promoted company.
Virgin is locked in a battle of egos and prestige against Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin in the private space travel industry.