In a report released yesterday, Oliver Chen from TD Cowen maintained a Buy rating on Virgin Galactic Holdings (SPCE – Research Report), with a price target of $4.50.
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Oliver Chen has given his Buy rating due to a combination of factors that highlight Virgin Galactic Holdings’ strategic progress and potential for future growth. The company is on track with its plans to introduce commercial services by the second half of 2026, with a focus on building a fleet of Delta Spaceships that are expected to generate significant revenue and EBITDA margins. This strategic development is supported by a backlog of 675 passengers and plans to open ticket sales in early 2026, indicating strong demand for its services.
Furthermore, Virgin Galactic’s financial management shows a controlled approach to spending, with expectations of free cash flow improvement as the company moves past its peak infrastructure investment phase. The company’s balance sheet remains robust with substantial cash reserves and available credit, providing a cushion as it transitions to revenue generation. While there are inherent risks associated with the aerospace industry and the company’s reliance on external suppliers, the potential for scaling operations and achieving full-scale spaceport operations in the U.S. by 2028 supports the positive outlook. The price target of $4.50, based on a discounted cash flow analysis, reflects confidence in the company’s future operations despite current challenges.
Chen covers the Consumer Cyclical sector, focusing on stocks such as Ermenegildo Zegna, Kohl’s, and Costco. According to TipRanks, Chen has an average return of 5.1% and a 51.50% success rate on recommended stocks.