The U.S. Federal Aviation Administration (FAA) has barred aerospace firm Virgin Galactic Holdings (SPCE) from flying its SpaceShipTwo rocket plane until the company receives the agency’s approval for its final July mishap investigation report or establishes that the issues do not impact public safety, Reuters said in a report.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The California-based company makes advanced air and space vehicles. Furthermore, it is developing commercial spacecraft and plans to offer suborbital spaceflight services. Virgin’s shares lost nearly 3% on Thursday. It fell another 1.2% in extended trade to finally close at $25.69.
The FAA is currently investigating a deviation in the descent of SpaceShipTwo that carried founder Richard Branson to the edge of space on July 11. (See Virgin stock chart on TipRanks)
The agency said, “SpaceShipTwo deviated from its Air Traffic Control clearance as it returned to Spaceport America in New Mexico. Virgin Galactic may not return the SpaceShipTwo vehicle to flight until the FAA approves the final mishap investigation report or determines the issues related to the mishap do not affect public safety.”
In response, Virgin said that it was “addressing the causes of the issue and determining how to prevent this from occurring on future missions.”
“The deviation in the July flight known as Unity 22 was a controlled and intentional flight path that allowed Unity 22 to successfully reach space and land safely at our Spaceport in New Mexico. At no time were passengers and crew put in any danger,” the company added.
Meanwhile, Virgin Galactic is planning another SpaceShipTwo flight from New Mexico in late September or early October. The flight, which is pending technical checks and weather, will carry three crew members from the National Research Council and the Italian Air Force.
Last month, Bank of America Securities analyst Ronald Epstein reiterated a Sell rating on the stock and cut the price target to $25 from $41 (downside potential of 3.8%).
The analyst said, “We see short-term downside pressure to the stock price as a) delayed commercialization results in lack of catalysts, b) the market stays attentive to the next equity raise, and c) the next lock-up period expires.”
Overall, the stock has a Hold consensus rating based on 4 Buys, 5 Holds and 2 Sells. The average Virgin Galactic Holdings price target of $36.30 implies nearly 40% upside potential. The company’s shares have gained 57.2% over the past year.
Related News:
Chevron, Bunge to Join Hands to Create Renewable Fuel Feedstocks
Ciena Q3 Earnings Beat Estimates; Shares Pop 3%
Patterson Shares Jump 6.6% on Solid Q1 Beat