UPDATE: Bernstein Downgrades Virgin Galactic (SPCE) to Underperform, 'Challenge to fund a longer timeline'

Bernstein analyst Douglas Harned downgraded Virgin Galactic (NYSE: SPCE) from Market Perform to Underperform with a price target of $4.00.

The analyst comments "We now have less confidence in the success of this business. We previously saw potential for high operating cash generation, but with substantial risk. In our view, risks grew significantly during the last 18 months. Given postponements in the timeline, we see limited potential for positive near-term catalysts. There are potential negative catalysts if we see more slippage in the timeline and/or the need to raise even more cash - raises that will be increasingly expensive. We increased our cash burn forecast. Without positive catalysts, we do not expect much upward volatility in the share price over the next twelve months, as we had seen last year. To become more positive, we need solid evidence that the schedule will hold and cash needs can be kept under control, meaning a turnaround from the last 18 months."

For an analyst ratings summary and ratings history on Virgin Galactic click here. For more ratings news on Virgin Galactic click here.

Shares of Virgin Galactic closed at $6.28 yesterday.

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